They stressed that they will not stop raising interest rates unless inflation (price inflation) falls to an appropriate level.
Jerome Powell, chairman of the U.S. Federal Reserve System (Fed), said at a monetary policy meeting in Sintra, Portugal, that at least two rate hikes will be needed this year to lower inflation to the target of 2%. This means that it will maintain its existing position, which suggested an additional 0.5% point increase by the end of this year.Chairman Powell said, “In order for root inflation to fall to 2%, it should not be until 2025,” adding, “The longer inflation lasts, the greater the risk of fixation.” Time is not on our side,” he diagnosed. “The policy may not be limited enough,” he said, adding, “The majority of the Federal Open Market Committee (FOMC) members also expressed their support for further rate hikes in interest rates.”
European Central Bank (ECB) Governor Christine Lagarde also predicted that the ECB’s rate hike next month is almost certain. “If there is no significant change in the outlook, we will continue to raise interest rates until July,” he said. Andrew Bailey, president of the Bank of England (BOE), the British central bank, also made hawkish remarks, saying, “We will take the necessary measures to turn inflation to 2 percent.”
On the other hand, Kazuo Ueda, governor of the Bank of Japan (BOJ), explained that Japan plans to freeze interest rates, saying core inflation has already fallen below 2%. However, if there are signs that inflation of 2% will become a reality, interest rate policies can be changed at any time.
JULIE KIM
US ASIA JOURNAL
