Inflation may have finally peaked around the world, but central banks remain on alert amid an uptick in some countries and the stickiness of underlying price measures in others. Whilst the view that inflation will continue to decline in the coming months hasn’t changed, policymakers are concerned that it’s not coming down fast enough, and this raises the risk that inflation expectations may start to become unanchored. But what if the risk of that happening isn’t very high at all and the real danger for central banks is inflation falling off a cliff? Overcompensating for a policy mistake? It goes without saying that ... (full story)