The recovery risks

Economic management in India will remain tricky

The Joe Biden administration plans to spend $1.9 trillion to stimulate economic activity in the US. Such a large fiscal programme would have perhaps lifted confidence in a pandemic-battered economy even until a few months ago. But things have changed quickly: Economic activity is picking up and the expected return of demand with the ongoing vaccination programme is fuelling inflation fears. The 10-year US government bond yields have increased to about 1.5 per cent, compared to a low of about 0.5 per cent in August 2020. Higher inflation and sustained increase in bond yields will have wider implications, not only