Across the globe central bankers and politicians alike have been taken by surprise by consumer price index (CPI) readings. Within a couple of months CPI forecasts have more than doubled and year-on-year price increases are now beyond 6 percent in the US, and 4.5 percent in Germany (beyond 4 percent in the Euro area). Central bankers argue that higher levels are a result of supply chain imbalances, and are therefore “transitory”. On the other hand, some economists and institutions are calling for a withdrawal of massive monetary support that resulted in a new (ultra-low and in some places even negative) regime of interest rates. They believe that keeping low interest rates provide a distortion in the real economy and lead to asset bubbles in financial markets. And more importantly, they argue current forces behind CPI increases are not dissipating soon enough, i.e. they are not transitory in their nature but permanent. You are kindly invited to read the full article, written by Dr. Aleš Berk Skok, partner at ALPHA CREDO, on the The European Association of Corporate Treasurers’ (EACT) website by using the following link.