During this week, central banks around the world changed course and took inflation seriously.

The Fed, the European Central Bank, or the Bank of England no longer talk about whether the rapidly rising prices are temporary, temporary, or short-lived. Instead, they began to worry about the “persistence” of high inflation.

This European Central Bank and Federal Reserve Significantly reduced the asset purchase plan. The central banks of the two wealthy economies, UK and Norway, Raise interest rates.Nine central banks of emerging economies, from Chile to Russia, Which also pushed up interest rates.even though Bank of JapanThose who are more often worried about deflation have cancelled monetary support for the coronavirus crisis.

Rarely has the global economy undergone such a significant shift, turning to a more hawkish inflation outlook. Barclays Macro Research Director Ajay Rajadhyaksha said: “The central bank is clearly turning to austerity faster than it might have occurred a few months ago.”

ING foreign exchange strategist Francesco Pesole said that the most important new information this week is “the centrality of inflation in policy discussions.”

In addition to putting inflation at the center of their thinking, officials in charge of monetary policy have also reduced their importance to the coronavirus and its impact on economic activity. Statements by the Federal Reserve, the European Central Bank, and the Bank of England have all emphasized the uncertainty surrounding Omicron variants. But no one thinks this will be critical to the policy in the coming months.

In the United States, Federal Reserve Chairman Jay Powell stated that Omicron “has nothing to do with” its plan to accelerate the removal of monetary stimulus measures during the pandemic.

The President of the European Central Bank, Christina Lagarde, emphasized that “our economy has become more resilient, stronger, and more capable of adjusting wave after wave, wave after wave of change.” As for the United Kingdom, Bank of England Governor Andrew Bailey said that it is not yet clear whether Omicron will increase or reduce inflationary pressures, “this is a very important factor for us.”

There is no indication that these responses are coordinated. However, the consistency of their information has raised concerns among some economists that major central banks may have forgotten how corrosive the coronavirus wave is.

“Central bank governors who take such a hardline attitude, or in the case of the European Central Bank, are not so gentle, the tilt has never been thought of…. Pantheon Macroeconomics chief economist Ian Shepherdson said that in October and November, Omicron A thunderbolt will usher in the blue sky. “It’s surprising to me that people are not more willing to accept that things can actually get really bad for a while. “

The fundamental reason for the increase in inflation is that global demand exceeds the world’s ability to provide goods and services. However, even though the leading central banks have acknowledged this problem, they have chosen to solve this problem in different ways.

The Fed’s rapid withdrawal from the quantitative easing policy and the signal that it will raise interest rates three times next year to maintain interest rates between 0.75% and 1% have been well communicated. However, the view of some economists is that it is too late-given that the US inflation rate is close to 7%, it is already at the highest level in the past four years.

Ethan Harris, head of global economic research at Bank of America, said: “The Fed is slowly surrendering… We will see [interest rate forecasts] It’s hard to move an inch. ”

In contrast, the Bank of England’s interest rate hike surprised everyone. It believes that it cannot wait because the bank has received reports that the company plans to further increase wages and prices when the UK inflation rate has exceeded 5%.

As its chief economist Huw Pill told CNBC on Friday, the Bank of England had to raise interest rates “to ensure our credibility [2 per cent inflation] objective”.

The European Central Bank is calmer because it believes that there are fewer signs of rapid wage growth in Europe than in the United States or the United Kingdom, and it continues to expect Eurozone inflation to fall below its target in the next two to three years.

Krishna Guha of Evercore ISI said: “The appearance of European Central Bank President Lagarde has given us more confidence in the outlook for the economy and a more balanced view of Omicron, which makes us feel Shocked.” “This largely reflects the fact that underlying inflation dynamics in the Eurozone are still sluggish.”

A global outlier of these central bank actions From turkey, Although the inflation rate exceeded 21%, it still lowered interest rates to 14%; boosted consumer demand, the minimum wage rose by 50%-and then watched investors flee. For others, this is a cautionary tale. As of noon on Friday, the Turkish lira had fallen by 17% against the U.S. dollar in a week.

The hawkish actions of other central banks should not be seen as proof of their independence from the government. Inflation has become a political issue in many countries, especially the United States, and the central bank’s actions have been supported by politicians.

In addition, policies are still providing stimulus and interest rates are still low. If the economic impact of Omicron proves to be worse than expected, there is room for relaxation again.

But now that the tightening cycle has begun, the greater challenge facing the central bank is getting closer. If they have to go further than this week and make unpopular decisions to squeeze persistent inflation out of the economy, then it will come. Their greatest test has yet to come.

Additional report by Martin Arnold in Frankfurt