BIS Carstens - Inflationary pressures set for now, higher rates needed

Price pressures are unlikely to ease soon and central bankers, now awake to the growing risks, must ready for policy rates rising to levels "more appropriate for the higher inflation environment" and to slow rising inflation expectations, Agustin Carstens General Manager, Bank for International Settlements, said Tuesday.

• Adjusting to a higher rate environment will be difficult and unpopular in many countries, with all economic stakeholders used to low rates and accommodative policies, he said, but it was now time for other policies to 'take the baton' for growth.
• Accepting price pressures have surprised most observers, Carstens said inflation, -- largely a result of pandemic-triggered supply and demand shifts, unprecedented fiscal and monetary support and now the war in Ukraine -- was becoming a global problem.
• Even many parts of Asia were now seeing upwards pressure, with prices in most parts of the developed world more than 3 percentage points above 2% inflation targets.