Apart from the continuing political instability in the Middle East, the most important macro events of the week were focused on inflation. We have known for a while that headline inflation is now rising, especially in the emerging world, because of the increases in food and energy prices. Now it appears that core inflation is also rising, despite the very large output gaps in most developed economies. Central bankers are now seriously split on whether to tighten policy, but the majority view still seems to be dovish. Read more
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