As we discussed last month, when the Fed laid out a timeline for the end of QE and a potential liftoff in rates, it signaled the end of globally coordinated easy money policies.

A day after that December Fed meeting the Bank of England raised rates for the first time since the pandemic. 

The Reserve Bank of Australia ended its QE program today, and set expectations for a potential rate hike this year. 

The European Central Bank meets on Thursday.  It has dismissed the idea of rate hikes this year, but the market is pricing in two. 

Even the Bank of Japan, which has been dealing with three decades of broad deflation, and has had interest rates near zero for nearly a quarter of a century, is debating a post-pandemic rate hike.

This, all because the central bankers know they are way behind.  Europe, the UK, Canada, and the U.S. are starting from near zero rates, and they will be chasing inflation that is running around 5% or higher.   

The global inflation fight is here and is in the very, very early stages.

The good news:  Thus far, central bankers have done a good job managing inflation expectations.  If inflation expectations were to become unhinged, the central banks would have a far bigger battle to fight.