- Broad wage inflation, sustained supply bottlenecks could boost US prices more than expected
- That could trigger faster Fed rate hikes
- In turn, that could rattle financial markets and result in slowing US demand, capital outflows from EM
- Global recovery to continue in 2022 and 2023, but risks remain elevated by the pandemic
Despite the above remarks, the IMF says that they continue to expect robust US growth and sees inflation moderating later in the year. That sort of fits with the narrative that major central banks are putting out for now. As for the risks outlined, they are not wrong but these are ones that market players are quite in tune with already.
It's pretty much a "wait and see how it goes" kind of thing now.
