The adage, “Discretion is the better part of valour,” has never been more pertinent as the U.S. Federal Reserve cautiously navigates between the perils of inflation and deflation. In the world of economic policy, the Federal Reserve finds itself delicately engaged in a balancing act akin to a tightrope walker traversing a starlit sky obscured by clouds. The elusive concept of the “neutral interest rate” remains shrouded in uncertainty

In early 2021, I presented a thesis regarding the latest inflation episode and its potential economic implications. At that time, I shared a perspective that differed from the prevailing narrative. Allow me to recapitulate my viewpoint.