With central banks ratcheting up their response to a global inflation shock, debate is shifting from when they'll win the war to whether faster rising prices are here to stay in a supply-constrained world.
The risks of an emerging era of high-inflation have been sketched out by top central bankers, led to debate about whether current inflation targets may prove ruinously strict and started shaping the views of corporate officials laying plans for the post-pandemic world.
Central banks might make some progress toward their inflation targets by raising interest rates and managing demand, Morgan Stanley Chief Operating Officer James Gorman said at the Reuters Next conference in New York. But getting all the way back to the 2% level most have set as their aim may be hard in a world where supply chains, demographics and other challenges will conspire to keep prices higher.