Inflation - easy come easy go

Callum Thomas

Late last year growth and inflation were jointly on the rebound, in global a synchronized upturn. But lately the inflation aspect appears to be quickly deflating. The chart below was part of a broader discussion on the global economic pulse in the latest Weekly Macro Themes report and illustrates a rapid shift.

http://https://dpsi7pmz5b6vt.cloudfront.net/uploads/ckeditor/picture/1074/content_global_PMI_price_indicator.PNG

The chart shows a global view of the prices subindexes of the PMIs - compared with the annual change in the GSCI commodity index. Clearly the commodity rebound drove a lot of the inflation rebound. But given still strong growth dynamics in developed economies and increasingly tighter capacity, I would say the inflation rebound was in the right direction.


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