Supply Shocks, Not Demand, Drove Inflation Spike According to Unicredit's Nielsen; Brace for More Volatility Ahead
• Inflation was primarily driven by supply shocks rather than demand shocks, according to Unicredit's Erik Nielsen
• Rapid decline in inflation despite strong labor markets supports supply-shock theory
• Shift in data causing some monetary officials to return to old policy models rather than throwing them out
• World will face more shocks going forward; central banks can't fine-tune to meet inflation targets consistently
• Had over a decade of "lucky" low inflation, but now world will see more bumps and shocks leading to inflation spikes