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ECB should follow Fed and tighten policy
Decision-makers and commentators who claim that the spike in inflation is transitory are making a mistake. Pre-emptive pronouncements forecasting future abatement of price pressures should be avoided. Instead, it would be better to tell financial markets and the public that the rekindling of inflation – at the highest headline level for 30 years in some leading countries – is a serious matter that central banks will tackle in line with their mandates. After the pandemic-induced recession, the world economy is in a vulnerable state. If central banks react sensibly and moderately to inflationary risks, they will ... (full story)