Central banks' concern over inflation and its impact on economic activity

Over the past year, curbing inflation has been a top priority for central banks, including the Federal Reserve in the US. Despite the US economy's surprising growth and falling inflation rates, there is still uncertainty about whether the strong growth can continue uninterrupted. The accumulation of excess savings and slowing inflation have contributed to the resilience of American consumer spending. However, the goods deflation may soon run its course, leading to increased inflation and the need for the Federal Reserve to keep interest rates higher than expected.