– February 21, 2011

“There are two lessons here. One short-term, the other long-term. First, policymakers and investors need to shake off the belief that the current inflation spike is temporary. Even if food and energy costs were to temper in the coming months, core price pressures will still pick up unless growth falters. Therefore, interest rates need to rise from their near emergency lows. China has already made a start, and India has hiked more than others. But much more needs to be done here, while in most of southeast Asia the tightening cycle has barely begun.” Read more.

“Inflation Isn’t Temporary”
Frederic Neumann
beyondbrics, Financial Times blog, February 21, 2011.

Image by Salvatore Vuono / FreeDigitalPhotos.net.

Tom Duncan

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