Inflation Isn’t Gone For Good
The more you hear it’s not a problem, the more worried you should be.
Not finding any inflation — yet.
Photographer: NOEL CELIS/AFPAfter the world has finally worked its way beyond the Covid-19 crisis, it may have to confront a danger that almost everybody has forgotten: higher inflation. At the moment, it’s the last thing investors and governments are worried about, which is exactly what makes the threat so plausible.
It has been decades since governments have lost sleep over high inflation. Especially since the Great Recession of 2008, their biggest anxiety has been just the opposite: Central banks have struggled to raise inflation to their target rates, and with interest rates stuck for years at the so-called effective lower bound (zero or a bit less), they’ve worried mainly about the risk of deflation.