Global | An Update On The Global Outlook With A Focus On Inflation

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Jorge Sicilia (BBVA Research) | Price pressures continue to build up; inflation is at high levels mainly in the US, but also in the Eurozone, while in China it remains still relatively low. The recovery will continue, but will lose momentum on the ongoing supply shocks and impact on inflation, which will lead CBs to act earlier, especially in the US.
A solid demand recovery on stimuli, savings and vaccines, coupled with supply shocks, is fueling prices; growth and inflation are likely to ease.
A host of supply shocks driven by all sort of bottlenecks and energy prices contributed to both lower growth and higher inflation, a textbook supply shock.
Are we shifting to a new inflation regime with generalized wage pressures and higher expectations? Tradeoffs for policy makers are getting harder. Policy reaction will be key.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.