The facts are changing again Our global outlook centers on a tension not seen in decades. Healthy private sector  balance sheets and pent-up pandemic demand are generating robust demand and  income growth. At the same time, aggregate supply is already tight and the mix of  above-potential growth and lingering supply constraints is absorbing slack rapidly. 

This tension is pushing inflation higher even after discounting near-term pressures  from manufacturing bottlenecks and the energy sector. In response, central banks  have pivoted hawkish in recent months and are set for an early adjustment of their  highly accommodative stances. While flagging that a path toward complete normalization of policy stances would be needed to contain building pressures, recent  developments suggest this anticipated normalization may not come soon enough  or be large enough. The facts are changing as broad-based inflation pressures give  rise to earlier-than-expected pressure for a synchronized shift toward restrictive  policy across the globe.