> Without blowing out the labour budget so badly, prices won't increase so quickly, and so inflation tempers. In Europe inflation seems to be primarily been dr

> Without blowing out the labour budget so badly, prices won't increase so quickly, and so inflation tempers. In Europe inflation seems to be primarily been driven by supply shortages, and the rise of food and fuel prices later on. We don´t discuss China often, but they are shutting of complete cities at this moment, driven by the zero-covid policy from Xi (who has committed himself politically to it). This really results in huge production/shipping delays. This comes on top of all the other disruption of supply chains we had in the past covid years. Normally you rise the interest rate to tamper demand. But one could argue that we have a very special case here at hand, where the problem is on the supply side of things rather than the demand side. The US might be a bit different here compared to Europe, as the former did inject more money directly into the economy than the latter. But it would be good to investigate what part of the current inflation is driven by too much demand vs which by a shortage of supply. > Not because they shouldn't make more, but because low-income households are more sensitive to price variability (prefer stability), Indeed, a Central Bank's main purpose is to provide price stability, and to allow for just a little bit of inflation to keep things going.