Central Banks' Dilemma: Celebrating Too Soon on Inflation?

While inflation has decreased in many developed countries, approaching central banks’ 2% targets, experts warn against premature celebration. Historical examples, like the 1970s U.S. inflation resurgence, demonstrate that inflation can unexpectedly return after periods of apparent stability. Factors such as monetary policy changes, political pressures, and external shocks can quickly reignite inflationary pressures, suggesting caution is warranted in declaring victory over inflation.



Source link