Within financial news coverage of central bank activities and interest rate markets, our models determined that, after a brief flurry of begging for Fed intervention in early 2020, the dominant archetypal language in central bank coverage for most of 2020 was speculative inflation language. Traditional media outlets, the sell side, the buy side and corporate earnings releases which discussed interest rates at all emphasized uncertainty and speculation about potential inflation that might result from aggressive intervention.
That shifted in late 2020 toward a narrative structure defined less by speculation about inflation and more by speculation about whether hawkish policy would be necessary or whether dovish policy would continue to be feasible. Our judgment was that common knowledge tilted away clearly from fears that banks would be forced to intervene in the direction of "inflation is transitory" in mid-April 2021. In other words, we think there's a moderate but generally held belief among investors that other investors and the Fed are betting on transitory inflation. More importantly, we think significant missionary effort (i.e. effort to shape common knowledge) is being exerted to maintain this narrative.