What once looked overzealous now appears prudent. Central banks that moved early to pare back stimulus and hike interest rates may have made the right call after all. While we wait for scientists and medical authorities to gauge how big a risk Covid-19’s omicron variant poses to public health, inflation is a sure thing. The global recovery has not lost significant momentum — yet.

Policymakers need to respond to what’s in front of them. Sure, they could wait. And wait. But the pandemic never offered simple choices. This helps explain why Federal Reserve chair Jerome Powell’s remarks on Nov 30 that the Fed may speed up its taper of asset purchases came as such a shock. 

After months of trying to convince markets that this bout of high inflation would pass, he gave up on the word “transitory” altogether. There may not be clarity on omicron, but there is now conviction — arguably for the first time in decades — that inflation needs to be tackled. 

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