Global Macro Service > Research Briefings > Global
Concern is rising that inflation may take off in advanced economies as labour markets tighten and spare capacity diminishes. We agree it is set to rise after years of surprising to the downside. However, we remain sanguine about the risk of a sustained bout of above-target inflation that would require a notably faster pace of policy tightening than markets are pricing. Spare capacity is greater than it appears while structural factors exert a strong downward pull.
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