There have been recent signs that US inflation isn’t as well behaved as we had hoped at the end of last year. This has dashed expectations for an interest-rate cut in Q1.

Can the high-inflation era of the 1970s provide lessons for what’s happening today? Perhaps, if we understand that period as a series of energy and other shocks over the years.

Reasons for why inflation may flare up again include disruption to shipping in the Red Sea and tight labour markets in developed economies.

Growth trajectories in major economies have been diverging, but this will reverse in 2024 as the gap between leaders and laggards starts to close.

Interest rates in developed markets will start falling this year, except in Japan. Longer-term rates will eventually settle at lower levels than many people think, once Covid-era distortions fade and long-term trends reassert themselves.