The leading central banks hold the financial markets in their hands. Last year they took us to new summits for global share prices. In response to the pandemic they drove interest rates down to zero and below and promoted a long and large bull market in government debts. Now they are wobbling in their support.
They show growing remorse for the inflation they see around them while being reluctant to accept the blame for it. China is the exception as the central bank injects some cash to prevent a regulatory attack on property companies from leading to a collapse in the banks that have lent to the sector.
China avoided zero interest rates and quantitative easing. It has a more modest level of consumer inflation. It also suffers from the commodity and component inflation seen globally. The fears I expressed in my last column about the prospects for 2022 — inflation, monetary policy tightening and growing political tensions — have become more visible in the first month of trading.