Global inflation could be transitory | The Express Tribune

Global inflation could be transitory | The Express Tribune


NEW YORK:

Central banks and markets may have abandoned the narrative that inflation is ‘transient’, say economists and analysts, but it is more likely that the current price increase is temporary and will soon start to decrease. ). Former Bank of Canada Governor Stephen Poloz said: “I admit I am still in the transition group.

Central banks around the world have revised their previous position that inflationary pressures are temporary and embarked on a series of rapid rate hikes.

Poloz, however, said that while the price rally lasted longer than the market expected due to external shocks, they may have peaked.

“Exogenous increases in commodity prices take more than a year to peak, meaning ‘transient’ is defined as at least 24 months,” he said. Some economists have seen a combination of central-bank interest rate tightening, the growing possibility of a recession, and the abandonment of commodity-price gains following Russia’s invasion of Ukraine. factors that contribute to reducing price pressure. “The fact that many central banks are raising interest rates now could potentially weaken the economy and weaken demand,” said Takahide Kiuchi, a former board member at the Bank of Japan. know.

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