Pimco Says Current Inflation Shock Will Be Short-Lived

Pimco economist Tiffany Wilding believes the current energy-driven inflation spike is temporary and stagflationary, ultimately weighing on growth and real incomes despite traders pricing in more hawkish central bank paths. EUR and GBP could see volatility as markets have priced aggressive tightening from ECB and Bank of England. If Pimco's view proves correct, both currencies may weaken as hawkish expectations unwind.