Even the core rate of inflation, not including energy and food, was four per cent, a level not reached since 1991. This jump in inflation is due to a combination of strong demand and a shortage of supply for many goods.
This fine line is also reflected in the extremely cautious statements made by Fed Chair Jerome Powell during the last press conference. They ranged from reassurances that the expectations of some governors, as expressed in the so-called “dot plots”.
Bert Flossbach, co-founder of Flossbach Von Storch, one of the leading independent asset managers in Germany, discusses the necessity of having accommodative monetary and fiscal policy in conjuction.