Bank of England forecasts inflation Will reach a peak of 5% In April.Isabel Schnabel of the European Central Bank November said Inflation may have reached its peak. The statement of US Treasury Secretary Janet Yellen (Janet Yellen) is not very accurate: She just said that the decline will begin sometime in the first quarter.The Fed did not try to predict the timing of the turning point, but the policy makers Full-year inflation forecast It will be approximately 2.6%, compared to approximately 7% in 2021. If these central bankers are correct, then inflation-last year’s economic burden-will gradually disappear for most of 2022.

That will only bring different challenges. Last year, the central bank governor may argue that certain inflationary pressures will prove to be temporary, and that the global economy is still recovering from the pandemic-induced recession to justify inaction. To some extent, this year’s data may prove that they are correct-even if their peak forecast is a few months later, or maybe a few percentage points. To some extent, thanks to the statistical quirks of central bankers. The higher headline inflation last year reflects a comparison with the worst period of the 2020 pandemic. The annual data for 2022 will be compared with the price surge in 2021, which is even more gratifying.

There are other one-time effects.This includes the reversal of production cuts caused by the pandemic in the Eurozone German VATEven if the prices of used cars and gasoline remain high, they are unlikely to repeat the same mistakes-in the United States, these two categories have increased by 31.4% and 57.5%, respectively, in the 12 months to December 2021. There are preliminary signs that the backlog of ports is slowing down, and manufacturing companies report that delivery times for key components are improving.

The shortage of durable goods may even give way to oversupply in 2022.The Bank for International Settlements warned “Bullwhip Effect” Because the temporary shortage of parts will cause the company to over-order and build inventory to deal with future problems. Initially, this increased demand — from consumers shifting spending from services to goods — increased the pressure on the supply chain. However, it will eventually lead to a surplus because the company finds that they have more things on hand than they might use or their customers want.

But just as central bank officials were wrong to overreact to the temporary factors pushing up the headline inflation rate in 2021, they should not be misled by the short-term trend of curbing inflation in 2022. Central bank governors will need to stick to their plans to tighten policies, rather than explain their inaction when inflation is rising.They need to do what they urge others to do and focus on the details of the numbers instead of the headlines-stick to The script they made On how to “shrink” asset purchases and raise interest rates.

Although the so-called temporary drivers of inflation will gradually disappear, public expectations of price increases may catch up with inflation in the past 12 months. This may become a self-fulfilling prophecy, especially if the labor market shrinks more as the effects of the pandemic fade-unless there are any new variants. These factors, not the changes in the global oil market or the special problems of semiconductor manufacturers, are the appropriate areas for central bank governors. The irony is that even if the highest price pressure disappears, the biggest inflation challenge facing monetary policymakers will still begin.