It is again becoming clear that deflation remains the overarching structural threat to the world economy.

A few brave analysts are already starting to flag a return to emergency QE as soon as next year, convinced that the US Federal Reserve and the European Central Bank have over-tightened and set in motion a deepening credit crunch.

Fed minutes published on Wednesday night reveal that the Fed's own staff think that contagion from the collapse of Silicon Valley Bank has all but guaranteed a recession starting later this year.

This will smother any lingering pockets of overheating and lead to an output gap in the US economy by early next year, accompanied by plummeting inflation.

The larger point is that traumatic events of the last three years have not led to lasting inflation after all, let alone a replay of the Great Inflation in the 1970s.

There has been no fundamental reset of the monetary process. The International Monetary Fund says that for all the noise we remain in the grip of 'secular stagnation'.

The inflation spike caused by the pandemic and Putin's war – or rather, caused by a miscalibrated burst of central bank money in response to those shocks – is essentially a one-off adjustment in the price level.