Mizuho with the note:
Central banks are often viewed as the guardians of inflation, but the Fed and ECB now face a predicament: with rapidly rising prices a political issue in the US and elsewhere, central banks that remain dovish have come under increased criticism and been forced to reframe some of their commentary.
Rate hikes are fundamentally ineffective when inflation is the result of supply-side constraints, as numerous central bankers have been reminding us. Rate increases designed primarily to head off an upward shift in inflation expectations can backfire: it is impossible to manage the markets with precision, meaning market rates (and exchange rates) can rise too far and damage the economy.
