November Inflation Tracker: Transitory Pressures Testing Central Banks

• Global inflation continues to hit new highs, prompting a hawkish shift by markets and raising concerns over the transitory nature of price pressures. 
• Fitch Solutions believe that inflation will start easing towards central bank target levels in H222, although this is a slower pace of deceleration than they initially expected. 
• Emerging markets have been hiking for several months as inflation has remained elevated, particularly in Latin America. Fitch expects that developed markets will start hiking in 2022; however it believes that rates will be less hawkish than what the market is pricing in.

 

(Source: Fitch Solutions)