Central bankers have misread inflation as transitory
Inflation won’t subside anytime soon.
That is the message from the head of the Bank for International Settlements , which bills itself as a “bank of central banks.” “We may be on the cusp of a new inflationary era,” said Agustín Carstens, general manager of the Basel, Switzerland-based BIS. Carstensat the International Center for Monetary and Banking Studies in Geneva.
“The forces behind high inflation could persist for some time,” Carstens said. “New pressures are emerging, not least from labour markets, as workers look to make up for inflation-induced reductions in real income. And the structural factors that have kept inflation low in recent decades may wane as globalization retreats.”Article content“The rise in inflation came as a surprise to most observers,” Carstens said. “At the start of last year, most expected inflation to remain low.
More than half of emerging market economies are experiencing inflation higher than seven per cent, added the BIS general manager.
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