Inflation & Prices

Why Is Inflation So Stubborn? Will Trump’s Tariff War Make It Worse?

Shoppers in the Nanjing Road West shopping area in Shanghai, China, on March 2, 2025.Photographer: Raul Ariano/Bloomberg
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Just when it looked like the Great Inflation era was over, the world is getting a reminder of how fragile price stability can be.

Lockdowns and supply-chain snarls from the Covid-19 pandemic sent prices soaring in 2021 and they were further propelled by a global energy crisis. This prompted central banks to undertake the most aggressive and synchronized monetary policy tightening in 40 years.