What's going on?
The OECD upped its inflation forecast for 2022 on Wednesday, but the economic organization thinks there’s a simple thing we can do to fix things: just vaccinate the whole planet.
What does this mean?
There’s good news and bad news. Good news: the OECD admitted that the economic recovery had been much stronger than it anticipated this year. Bad news: the organization reckons the inflation rate across 20 of the biggest economies will hit 4.4% in 2022 – up from its September forecast of 3.9%. And here’s some more bad news for good measure: the OECD said the new Omicron variant might just exacerbate matters, threatening the global recovery even more.
Why should I care?
The bigger picture: Didn’t your parents teach you to share?
The best way to keep the global recovery on track, the OECD argues, is pretty straightforward: get vaccines in arms around the world. After all, there’s a growing gap in economic growth between the rich countries that have comprehensive access to vaccines and the poor ones that don’t. But there’s hope yet: the organization said on Wednesday that it could cost as little as $50 billion to vaccinate the whole world – a drop in the ocean when you consider the $10 trillion that the world’s 20 biggest economies have spent offsetting the pandemic’s impact.
Zooming out: The Fed holds its hands up.
The OECD’s US inflation forecast for 2022 was one of the biggest jumps from September, going from 3.1% to 4.4%. Fitting, then, that the Federal Reserve finally admitted earlier this week that higher prices could be around for longer than it thought. That might be why it’s thinking about fully winding down its bond-buying economic support program a few months earlier than it had been planning, in a move that should push up the cost of borrowing and deter spending.