Jim Power: Supply strain to worsen further before it gets better

The world economy is experiencing the first supply shock since the two oil price shocks of the 1970s

Jim Power: Inflationary pressures are building on many different fronts, and central banks appear somewhat bemused and unsure about how to respond on the monetary policy front.

For at least a decade, the only conversations about inflation in economic and financial market circles was really about the lack of it and the desirability of generating some.

Hence, we have been living in a world of historically low short- and long-term interest rates for a prolonged period and central banks around the world have been pumping liquidity into the global financial system through quantitative easing (QE).