Again, can't speak for the US or Federal Reserve but the Bank of England are in the unenviable position of trying to curb inflation, yet get the economy back on track. To keep it simple, let's attribute inflation to the cost of oil increasing. We have very little, maybe no control over that, so traditionally when inflation is increasing the Bank of England would increase interest rates to stop public spending (this works as the cost of borrowing goes up - less people likely to borrow, and also the benefits of saving increases). If people aren't buying, producers cannot keep costs high and thus decrease them to curb inflation.
But this method hinders the economy - businesses certainly suffer. Also no one can get on the property ladder and mortgage borrowers find themselves paying more. To boost the economy, the Bank of England would reduce interest rates. But to do this would raise inflation through the roof.
With the current economic climate, the Bank of England can't afford to either raise interest rates (to curb inflation) or lower them (to boost the economy). It is literally being stuck between a rock and a hard place.
That's exactly what's going on here in the U.S., Turi. A few months ago, the "stagflation" word was being thrown around but with oil coming down since July (save for today's spike), the inflation hawks have been quieted. With that said, I bet we're in for more inflation pain in the coming quarters.
