The past two weeks have seen a sharp rise in inflation numbers across the world. The US CPI, which is the worlds most watched figure came in at 4.2 percent for April which is the fastest pace since 2008. Economists were expecting a reading of 3.6 percent and this compares with 2.6 percent for March.
However, the experience has been similar in other large economies, the Chinese Producer Price Index (PPI) which was announced last week rose by 6.8 percent which is the fastest rise in 3.5 years.
India's Wholesale Price Index (WPI) that came earlier this week touched double digits rising by 10.5 percent, albeit from a low base.
So what is the shape of things to come on the inflation front globally and what are the ramifications for an emerging market like India? How will the Fed react and will there be a taper tantrum like problem sometime soon for countries like India? To discuss this Latha Venkatesh spoke to Chetan Ahya, Chief Economist at Morgan Stanley.Watch video for more.