Inflation, and the Federal Reserve’s response to its economic threat, has been the dominant driver of financial markets for the past five months, culminating in the Personal Consumption Expenditures Price Index (PCE) reaching a 40-year high last week. There are numerous drivers for this: housing/rent increases, shortages of durable goods (from autos to air conditioners), decade-high energy and commodity costs, supply chain bottlenecks and labour shortages. In response to the inflationary threat, the Fed has committed to a rapid succession of interest rate hikes to rein in prices. Read