December 4, 2022

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4 reasons inflation is transitory

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A note via Fitch ratings analysts, Global Economic Outlook (GEO) (out Tuesday US time note)

A faster-than-expected global economic recovery is boosting prices as supply chains have struggled to keep up with rapidly expanding consumer durables demand and world merchandise trade. 


  • slower growth, 
  • supply adjustments in bottleneck sectors, 
  • a switch back towards services consumption, 
  • and fading impacts from US fiscal stimulus 

should see the rate of inflation decline in 2022 

On the Federal Reserve and European Central Bank:

  • We now expect the Fed to hike rates in 4Q23, one year earlier than our previous expectation.
  • The ECB will not follow suit and will likely continue asset purchases through 2023 as eurozone inflation remains below target.

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