Wednesday 1st December 2021You might have expected that Jerome Powell would use the uncertainty of the new COVID strain to downplay the need to adjust the speed of tapering by the Federal Reserve, but instead, addressing the Congress, he talked up the need for faster tapering, to be discussed at the next FOMC meeting. So, what’s brought about this character transformation? NAB’s David de Garis says he is clearly now far more worried about inflation. The ECB, meanwhile, is happy to keep using the transitory word and believes inflation has just about peaked. Meanwhile, China’s PMIs and prices paid gave a glint of hope that supply chain issues might be easing, albeit very slowly. But progress could be destroyed by the impact of measures to constrain the new variant. The future is as clear as mud and markets today reflect that uncertainty.

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