In sum, the important role of both positive demand-side and negative supply-side shocks in spurring inflation clearly shows that the current macroeconomic environment differs from the one before and during the pandemic, when downside risks to price stability called for an expansion of both monetary and fiscal policy to support risk-sharing and counter weakening demand.
Pulling together in a high inflation environment In the current high inflation environment, monetary and fiscal policies should pull together rather than working against each other.