Inflation is rising, what's next? - BofA

"Inflation initially collapsed in 2Q20 as the pandemic hit, but it has recovered quickly in recent months as central banks engaged in unprecedented easing. In turn, the aggressive expansion of monetary and fiscal policy in the US has led to fears of US currency debasement and overshooting inflation. For now, the sharp reflation in asset values like equities and bonds has overshadowed a modest recovery in cyclical commodity prices," BofA notes.

"At any rate, inflation expectations are rising around the world due to the end of the initial lockdowns, the unprecedented policy stimulus programs, the somewhat reduced Covid-19 death rates and the containment of coronavirus outbreaks in major economies. And while expectations are rising, coincident inflation indicators are also on the rise. Looking at global manufacturing price indices, we see a small uptick in recent months (Chart 7). Also we expect metals and energy prices to keep pushing higher into 2021," BofA add