MAMOKETE LIJANE: Emerging markets battling for recovery face a rising risk of debt distress
Variability in access to money between nations will haunt the global political economy
I wrote in an article in June (../bd/opinion/columnists/2021-06-22-mamokete-lijane-policy-making-based-on-the-past-can-lead-to-big-persistent-errors/) that we were in a world of heightened risk of policy error, and that policymakers would have to be much more agile and responsive as they waded into the fog. At the time, the US Federal Reserve (Fed) characterised inflation as transitory, and was reluctant to talk about tapering asset purchases, let alone hiking interest rates. The Fed was more worried about protecting growth, ignoring the shrill noise of those sounding the alarm about rising inflation risks.
Now tight labour markets and wage inflation suggest the risks to the inflation outlook in the US are high, and that inflation could be anything but transitory...
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