Inflation  overshoot with differential tails: Demand coming out of the Covid recession, boosted by stimulative policy, has confronted a sclerotic supply chain. Rising commodity prices have boosted infla-tion, but in our baseline  these prices peak then retreat, easing infla-tionary pressures. While the shock seems inherently temporary, the inflation dynamics differ substantially across countries.  In the US, we expect core PCE inflation to stay above the FOMC's 2%Y target all next year, but nevertheless move decisively lower. For the other DM countries, we see a similar pattern, and at one extreme, we see infla-tion temporarily  undershooting the target in the eurozone. In EM, we see more inflation being built in,  although  EM Asia appears more insulated. 

Growth is slowing, but not stagnating: We see global GDP growth for 2021 at 6.1%Y and stepping down to  4.7%Y in 2022; growth remains faster than potential through the end of the forecast. China is a special story, where we expect policy to reverse the recent sharp slowing, but still see medium-term growth below pre-Covid rates.