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MNI BRIEF: Commodities Likely To Hurt Disinflation- World Bank

(MNI) WASHINGTON

Stubbornly elevated commodity prices will make it harder for central banks to cut interest rates quickly this year, The World Bank warned Thursday.  

“Global inflation remains undefeated,” said Indermit Gill, World Bank chief economist, in a new report. “A key force for disinflation—falling commodity prices—has essentially hit a wall. That means interest rates could remain higher than currently expected this year and next. The world is at a vulnerable moment: a major energy shock could undermine much of the progress in reducing inflation over the past two years.”

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Stubbornly elevated commodity prices will make it harder for central banks to cut interest rates quickly this year, The World Bank warned Thursday.  

“Global inflation remains undefeated,” said Indermit Gill, World Bank chief economist, in a new report. “A key force for disinflation—falling commodity prices—has essentially hit a wall. That means interest rates could remain higher than currently expected this year and next. The world is at a vulnerable moment: a major energy shock could undermine much of the progress in reducing inflation over the past two years.”

Keep reading...Show less