Higher Prices: Transitory or Not?

 

Higher Prices: Transitory or Not?

 

Global Implications of Rising Producer, Consumer, and Asset Price Inflation

 

 

 

by Dana M. Peterson, Yuan Gao, and Ilaria Maselli Faster inflation pressures are cropping up everywhere and among a host of goods, services, and assets. Markets are worried and central banks are starting to take notice. Businesses are in a quandary and consumers are feeling the heat.   While higher prices are anticipated as the world rebounds from the pandemic-induced recession, the intensity of select price increases has caught some off guard. Moreover, everyone is wondering if upward inflation pressures are just transitory outcroppings of a pandemic supply-and-demand tug-of-war, or if elevated prices are here to stay.   The answer is that many of the pressures businesses and households are experiencing are largely temporary and will fade as the pandemic recovery works itself out. However, high costs for select consumables are here to stay, warranting close monitoring and potential action by central banks. For more, see our latest insights here.

 

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