e have argued that G4 central banks will react asymmetrically to inflation developmentsin the coming years. Having learned from their failure to achieve their objectives during the last expansion, they are now signaling a commit-ment to sustain accommodative policies far longer than their previous response functions would suggest. If global developments are set to push inflation sus-tainably higher, central banks’ accommodation will reinforce this reflationary dynamic. However, our baseline scenario sees the COVID-19 shock generating a volatile but ultimately disinflationary environment. We are not confident that central banks can (or are willing) to take the additional steps necessary in this environment to fight persistent disinflation. In this scenario their failure to act will reinforce the disinflationary dynamic.Recent guidance from a number of central banks empha