-
Bubbling Inflation Risks Could Create new Dilemmas
Inflation risks in the world economy could be ratcheting up, despite the winding down of the US Federal Reserve’s quantitative easing programme posing a new dilemma for central banks, which could have a considerable impact on forex markets. A resurgence of inflation would hit GBP and USD, but would likely be positive for emerging market currencies closely tied to commodity prices. Quantitative easing was designed to re-inflate economies and stimulate demand. So far the inflation impact has been muted, at least in the real economy. But there is a danger this could change. A classic path towards inflation involves ... (full story)