Our models show to keep inflation at bay, we would have to go very much higher, even up to 16 percent. If other signs are positive, we don't have to follow these models. But if they are not, we might have to go all the way.

The cows that are easy all year around, even the old ones, become quite crazy. In a way, the Icelandic entrepreneurs acted the same when we opened the stable.

It gave us a lot of spirit, and freedom inspired everybody. Maybe we did it a little bit too quickly. But in the end, it was the right thing to do.

The Fed will want several months to confirm that inflation risks have shifted lower and there are subtle phrases that suggest they're not really believers. Take core [personal consumption expenditure inflation] down to 1.5% and they'll sing a louder tune.

We think inflation in the middle of this year will be back below target. We are likely to see 5 percent base rates by the middle of the year.

We're seeing a little bit of upward pressure on inflation but it's not yet enough to spark a big concern in the market.