Perhaps unwittingly, ECB President Christine Lagarde today may have introduced a new era in the global economy.
"It looks increasingly unlikely that the disinflationary dynamics of the past decade will return," she said.
With that, she signaled a gradual rise in interest rates, without setting an upper limit.
Market participants have been arguing over the cause of the latest swoon in risk appetite; pointing to Fed tightening, short-term inflation or global growth worries.
But what if we're in the process of pricing in persistently high structural inflation? Lagarde pointed to a re-orinentation of global supply chains and the energy transition as long-lasting sources of higher prices. I'd add in demographics and broad under-investment in commodity production.
Ahead of today's pivotal (in the short-term) US CPI report, it's worth pondering what a world of stubborn +3% inflation looks like. We've all gotten drunk on cheap money for a decade and sticky inflation would be a monumental hangover.
I'll be writing about this theme extensively in the week ahead. Read her full speech here.