What's going on?

A major economic organization said on Tuesday that inflation is here to stay for the next two years, but it�s actually remarkably relaxed about the whole affair.

What does this mean?

Let us count the ways prices are being pushed higher and higher these days: massive pent-up demand, ongoing supply chain bottlenecks, sweeping government economic support, surging energy costs for manufacturers and homeowners alike � the list goes on. The US and the UK have already read the writing on the wall and bumped up their inflation forecasts, but now it�s the OECD�s turn: the organization is predicting that the inflation rate across 20 of the biggest economies will hit 3.7% in 2021 and 3.9% in 2022 � up from its earlier forecasts of 3.5% and 3.4% respectively.

Why should I care?

The bigger picture: There�s hope yet.
The OECD isn�t particularly het up about the situation, saying there probably won�t be much long-term damage to these countries� economies if they can successfully navigate the inflation challenges. It wasn�t quite so confident about emerging economies� chances, mind you: their high debt, high rates of infection, and low rates of vaccination mean they�re likely to have much weaker recoveries ahead of them.

Zooming out: China�s no biggy either.
China�s latest crackdown has plenty of investors on edge: the country�s been coming down hard on the property sector, which represents an estimated 29% of the country�s economy. So it follows that investors aren�t just worried about what effect the collapse of giants like Evergrande might have on the country�s economy, but on the world at large. But even that doesn�t seem to worry the OECD too much: it reckons China�s financial system isn�t interconnected enough with the rest of the world�s to cause wholesale problems.