Market history · Inflation ·
Inflation stops being "transitory"
Through 2021 central banks described rising inflation as transitory, driven by supply bottlenecks and pandemic reopening. By late in the year, US consumer prices were rising at their fastest annual pace in around 40 years, and the Fed's chair said it was time to retire the word.
In December the Fed sped up the wind-down of its bond purchases and signalled rate rises for 2022, the start of the fastest tightening cycle in decades.
The takeaway
Forecasts that anchor on the past are fragile when the regime changes.
This is a retrospective about a past event, provided for general information. It is not investment advice, does not describe RockLake's positioning at the time, and past performance is not a guide to future performance. Read the risk warning.