April 2022 Commentary: The Tipping Point

Summary

• Global markets have been roiled by a succession of blows in April – higher bond yields,
  lingering post-pandemic supply chain imbalances, a commodity price shock exaggerated
  by the war in Ukraine, and lockdowns across most major cities in China.
• Although markets have successfully brushed off recent shocks, stubbornly high inflation is
  a relatively new phenomenon – one that has not been experienced by investors,
  policymakers, and businesses in four decades.
• While policymakers have historically responded to shocks with additional monetary
  support, inflation may prevent them from doing that.
• Any additional inflation will hurt consumers at a time when policymakers cannot switch to
  being accommodative.

Read and download the commentary here.