Money
In our memory deprived world, very few remember or understand anything about inflation. In the old industrial world, you have to go back 40 years to the last inflationary era, which basically means no one under 55 has any conception. This includes people in institutions, especially financial and academia, where the study of such topics relies on no history. Why do you need history when you can just model the future?
Some institutions like the Fed do have institutional memory. There are ghosts and even a few bodies walking the halls who remember that last great inflation era. But the Fed is only a hundred years old, that era was their only experience in dealing with ingrained inflation. The ECB didn't even exist 40 years ago.
The great irony about money is its an open system, it can constantly change. The irony being any specific money system wants to assure all that it is unchangeable, constant, you know like gravity. But that has never been the case, and the money system has changed a lot in the last forty years, even more so in the last twenty.
One certain thing inflation means is there's too much money in the system. The Fed and other central banks know only one way to do deal with this, make money more scarce by raising interest rates, or today, quit buying the bonds they've become so fond of in recent years.
Today, the money supply is being tightened, and while money is an open system, when you tighten the supply you can bet on a couple things – markets will go down and the economy will slow. The FT has a piece titled, “Central banks embrace big rises to bolster currencies and fight inflation.”
They write,