If the annual jamboree of central bankers at Jackson Hole, Wyoming, was a virtual affair this year, thanks to the pandemic, the markets took the message from Fed Chairman Jerome Powell to be virtuous and continued to climb. The Fed would begin to taper its asset purchases, $120 billion a month at present, later this year itself, given the steady advance towards full employment in the American economy and sustained inflation above 2% — the Fed’s goal is to have inflation of 2% on average over the business cycle rather than at every point of the cycle. Probably, the markets shrugged off the signal that monetary policy would start retreating from extra-accommodative because of the promise of serious fiscal action by the US government: the US Congress is on course to adopt a $3.5 trillion infrastructure bill that would address both physical and social deficits. This is good news for the global economy, including, naturally,…

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