Central bankers have suddenly remembered why they get up and go to work every day. They are not – as some seem to think – there to find solutions to the problems that their own governments have been unable to solve.
But their remit is a simple one – it is to control inflation. And quite frankly, many have been asleep at the wheel. They can say what they like about asset-price inflation being volatile, and that it is a function of market forces that is beyond their control.
But house-price inflation is still inflation. Share-price inflation is still inflation. Bond price inflation is still inflation. And don’t get me started on inflated cryptocurrencies and over-inflated SPACs. They can all be symptoms of too much money chasing a limited supply of goods and services. That, by the way, is the definition of inflation.
Thankfully, albeit belatedly, central bankers have woken up. It still took them a while to...