A meeting of the Fed overturned the world’s expectations on interest rates. This means more than just a forecast. It signifies that the need to shift the trajectory of our expectations is now urgent.

The markets immediately took notice of the messaging. The up move in the dollar indices, the fall in commodity prices and the strengthening of the dollar were the immediate response. Inflation pointers become all the more critical now given the surge in prices across the board and the liquidity sloshing all over the world. The levers to control inflation are not exactly battle-ready and it is clear that Governments are hoping and praying things don’t get worse from here.

Though the rising commodity prices are giving a number of resource-rich nations some respite from the economic devastation COVID has subjected them to, the possibility of a second economic crisis due to high commodity prices is very real.

A balanced soft landing of economies is what the world wants right now. But, will we able to land on our feet when it happens? Only time will tell.

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