Thread by @biancoresearch

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The message from the BoE and the ECB this morning is inflation is transitory.

BoE head Andrew Bailey is on TV right now saying that while they hike rates today and will probably need to do more, inflation will peak at 6% in April. aka, transitory.

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To summarize the Lagarde/ECB presser, inflation is higher than we thought, it is possible it could go even higher. But do not worry, inflation is transitory, and we see no need to address it by raising rates in 2022.

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And as I detailed yesterday, the consensus opinion on Wall Street is STILL inflation is transitory.

https://twitter.com/biancoresearch/status/1471141362414374912?s=20

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Why are risk markets rallying? Inflation is not an issue and while central banks have to "say" they care about it, they will not really need to do anything that would make owners of risk assets "uncomfortable."

Is inflation an actual thing that needs to be addressed?

Or can central bankers fix it with words only?

Markets think words only.

40% of the public that does not own stocks or a home, think inflation is painfully real and want it stopped now.

How mad are they? Bottom panel.