Central Bankers Warn of Further Rate Hikes: ECB Forum
• Central bankers from the U.S., E.U., U.K., and Japan recently expressed support for further rate hikes in order to bring inflation down to the 2% target, despite fears of a significant economic downturn.
• The panel included Federal Reserve Chair Jerome Powell, Bank of England Governor Andrew Bailey, Bank of Japan Governor Kazuo Ueda, and ECB President Christine Lagarde.
• The central bankers urged persistance and determination in reaching their goals, noting that the “robust” jobs market called for further tightening to control the excessive inflation.
Central Bankers Warn Of Further Rate Hikes At ECB Forum
At the ECB Forum on Central Banking held recently in Portugal, top central bankers from around the world voiced their support for further policy rate hikes in order to bring inflation down to the 2% target, despite fears of a significant economic downturn caused by said hikes.
The panel included Federal Reserve Chair Jerome Powell, Bank of England Governor Andrew Bailey, Bank of Japan Governor Kazuo Ueda, and European Central Bank President Christine Lagarde.
Persistence And Determination
Lagarde urged persistence and determination in reaching their goals: “I think we have to be as persistent as inflation is persistent… We have to be resolute and decided and determined in reaching the target that we have set and not debate the target as we are running that race.“ Powell and Bailey echoed her sentiments by noting that due to a “robust” jobs market which calls for further tightening measures to control excessive inflation.
Central bankers were aware of potential risks involved with such aggressive policies but nonetheless stressed on sticking with their plan given how well-performing economies can still lead to higher prices if not properly managed through monetary policies such as rate hikes or reducing spending programs when necessary.
In conclusion, while there may be risks involved with taking aggressive action against high inflation rates through rate hikes or other policies, central bankers believe it is a necessary evil given current market conditions if they are going to reach their desired targets for price stability in economies around the world.