Of course, one must treat such estimates with caution as there is no historical precedent for a potential global decoupling of this scale. The modelling exercises conducted thus far generally find considerable cross-country heterogeneity in terms of impact, with small open economies reliant on global value chains most affected. I shall return to this aspect shortly.
Figure 3 shows that both components contribute to the rise in market-based inflation measures. If you look at the area marked in red in the bottom right, you can see that the negative inflation risk premium is vanishing quite rapidly. This means investors are again considering the possibility of higher inflation after a period of low inflation.