From: lessgovt@gmail.com   
      
   It’s a World of Inflation   
   By Karl Russell and Jeanna Smialek, July 5, 2023, NY Times   
   From Melbourne to Manchester to Miami, people are struggling under the weight   
   of hefty price increases for the things they buy each day.   
      
   The worst spike in inflation that many advanced economies have seen in decades   
   underscores the global forces driving prices higher, namely the disruptions   
   set in motion by the coronavirus pandemic.   
      
   The stakes are high for policymakers around the world, who are facing similar   
   problems. To try to get inflation under control, central bankers have rapidly   
   lifted interest rates, trying to slow their economies in hopes of cooling   
   prices.   
      
   If they fail to bring inflation under control, it could result in a   
   destabilizing period of spiraling prices. Higher and less predictable   
   inflation would squeeze families and businesses and make it harder to plan for   
   the future.   
      
   But if economic policymakers react too aggressively — and all at once — it   
   could crimp global economic growth to a painful degree. That could raise the   
   risk of a major recession that shutters businesses and puts people out of   
   work. Given the    
   potential cost, policymakers do not want to overdo it, harming their economies   
   more than is necessary to bring down inflation.   
      
   Many central banks are approaching those trade-offs similarly: They are   
   focused on fighting stubbornly high inflation. Officials fear that if they let   
   inflation persist for too long, it could become entrenched and prove even more   
   painful to stamp out.   
      
   The leaders of major central banks in North America, Europe and elsewhere have   
   said recently that they expect to continue raising rates, as inflation is   
   moderating but remains well above their typical target rates — which are   
   often around 2 percent.   
      
   Officials at the U.S. Federal Reserve have raised their policy rate to just   
   above 5 percent from near zero in March 2022, and they forecast raising it two   
   more times in 2023, to just above 5.5 percent. Policymakers at the European   
   Central Bank, which    
   sets policy for the 20 countries that use the euro, also expect to continue   
   raising rates, which have reached the highest level since 2001. The Bank of   
   England recently surprised investors by raising rates more than expected with   
   its 13th consecutive    
   increase.   
      
   Inflation surged substantially in the United States in 2021 but has come down   
   more quickly than in many parts of Europe. That’s in part because Europe has   
   more significant exposure to the effects of Russia’s invasion of Ukraine,   
   which has pushed up    
   food and energy prices sharply.   
      
   But stripping out those volatile prices, so-called core inflation looks   
   stubborn across many countries. That underscores the common problem facing   
   policymakers: Slow-moving prices for services are climbing much more quickly   
   than before the pandemic.   
      
   Prices for labor-intensive services like medical care and education tend to   
   track wage gains and the strength of the overall economy. In short, they are   
   the type of price increases that central banks can do something about by   
   raising rates to slow down    
   borrowing, curb spending and ultimately cool the economy.   
      
   At a recent gathering of central bankers, Jerome H. Powell, the Fed chair,   
   said that for inflation in the services sector, such as hotels, restaurants   
   and banks, “we are not seeing a lot of progress yet.”   
      
   https://www.nytimes.com/2023/07/05/business/economy/inflation-global.html   
      
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