Oliver Camponovo: Inflation is rampant, and the SNB is dozing off

published: 20 October 2021

Every day, more terrible news about rising costs demonstrates how serious the threat of inflation has grown.

The September value of the US CPI was released the day before yesterday (a monthly value of 0.4 percent, compared to 5.4 percent in the same month last year), and the September value of the PPI producer price index was released yesterday (a monthly value of 0.5 percent, compared to 8.6 percent in the same month last year).

If a significant deflation was feared a year ago, the “narrative” is now continuously changing. “It’s because the economy is reopening,” “it’s because of high energy prices,” “it’s because of supply restrictions,” and so on. They don’t seem to know what story to tell or what to do, in my opinion—neither in Switzerland nor other countries. If we want to summarize the situation, we may say that the macroeconomic vision has failed.