Central banks warned against staying on inflation

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Central bankers seemed a warning due to the threat of new inflation, with a warning of the deep effect of “scars” on families of the high rates of postpartum.

the Bank of International Settlements I found that families in 29 advanced and emerging market economies expect inflation over the next 12 months by 8 percent, which is much higher than the current inflation level of 2.4 percent.

This is the threat that the price expectations have become “unprotected” among the official inflation goals for central banks, as families and groups respond greatly to future prices in prices by demanding higher wages and raising prices in a bouncing cycle of self -enhancement.

Families are severely affected by iron Economic inflation expertise; Hyun Song Shin, head of the BIS Monetary and Economic Department, said when it comes to inflation expectations, it is made to bitten once a shy twice.

“It is known that the surveys of inflation expectations in captivity tend to exaggerate the estimation of real inflation. But if these perceptions are translated into actions and behavior, this will affect the economy.”

Central banks around the world reduce interest rates as the worst price increase in a generation. Inflation in advanced economies is scheduled to decrease to 2.2 percent next year, which is much lower than 7 percent above 2022, according to the International Monetary Fund expectations. In emerging economies, inflation will decrease to 4.6 percent compared to less than 10 percent that year.

But officials are still on the brink of the abyss given the permanent heritage of inflationary height after the end of the Covid-19 restrictions, which have exacerbated many economies due to the leaps of energy prices that followed the full Russian invasion of Ukraine as well as gains in the values ​​of other commodities.

President Donald Trump’s war added a new threat, especially in the United States, as the Federal Reserve retained politics this year, given the possibility of increasing tariffs to the highest levels in decades traveling at consumer prices.

BIS, a Bais, who advises central banks in the world, has argued that although temporary jumps in inflation are often seen as “relatively benign”, there is a risk that will lead to continuous increases in inflation fueled by upward transformations in expectations.

In its annual report, it found that the additional powers, such as the aging of the population, climate change, geopolitical tensions, and the less flexible supply aspect, can all contribute to a more volatile environment, making policy -making more fraught with central employees.

“Families may appear, in particular, to forgive less prices and a decrease in real wage after the sharp rise in the cost of living after the epidemic,” Agustín Carstens, General Manager of BIS warned: ”

“In the event of evidence of disposal of the will, central banks must respond quickly and force to inflationary shocks. The uncertainty surrounding the time, size and path of future definitions increases the complexity of this task.”

Jay Powell, head of the Federal Reserve, highlighted Jay Powell risks that people’s memories of inflation after impurities can hold the efforts of the US Central Bank to reduce price pressures.

Powell said on Wednesday that price lists in the United States were more confident that the customs tariff would shock one time in Trump’s first state.

The President of the Federal Reserve of the Senate Banking Committee said. But he added that, given the inheritance of global inflation, the threat of a taller than the pressures of the customs tariff was “something you want to approach carefully in a world where inflation does not return to 2 percent.”

Families’ expectations for inflation Fire After Trump revealed his “mutual” definitions on April 2, with opinion polls at the University of Michigan closely to the short and long -term inflation expectations that reached its highest levels in the early 1990s.

They have been rejected since then, after the decrease in trade tensions between the United States and China, but they remain at levels more than twice the goal of the Federal Reserve by 2 percent. The Federal Reserve confirmed that the market -based measures continued to show that inflation expectations between American investors are still well installed.

In its last meeting earlier this month, the Bank of England also reported the risks surrounding the expectation of inflation in the family and the “high” business, with concerns about an oil shock resulting from the conflict in the Middle East, adding to the causes of alert.