The first quarter’s run of higher than anticipated US inflation numbers have markets in a tizzy. Investors have been constantly tweaking their expectations for interest rates. The problem with all the frantic repricing is that it bestows an incisiveness on monetary policy that it does not actually possess — particularly at this stage of America’s inflation battle.

Rate-setting has become the focal tool to guide economies. Fiscal policy is politicised and limited by budget constraints, and supply-side reforms take longer than the electoral cycle to bear fruit — although both are arguably sharper instruments. Tax and spend decisions can be targeted, and their impact on demand is faster. Land, labour and capital reforms can boost long-run supply.

Nonetheless, the US Federal Reserve has historically played an important role in keeping inflation tame. Higher rates have helped pull price growth down from recent highs. But we need to be realistic about what rates can now achieve.