For example, there is a lot of excess demand for interest-sensitive goods and for housing, some of the key contributors to inflation pressures. Supply and demand should come more into balance in these segments as policy rates rise, reducing inflationary pressures.
In addition, the crisis was not contained but spread from the US to other advanced economies (AEs) and ultimately to emerging markets (EMs). It had serious ramifications for economic growth, employment and inflation, and ultimately elicited strong responses from both fiscal and monetary authorities.