Analysts at Bank of America have calculated there have been a whopping 470 interest rate rises globally over the past 2 years compared with 1,202 cuts since the financial crash.
The U.S. Federal Reserve has lifted its rates 500 basis points from near zero, the European Central Bank has hiked the euro zone’s by 400 bps and many developing world economies have done far more.
The question remains what more will be needed, especially with signs that companies are taking the opportunity to boost profits and workers are now demanding higher wages to prevent a further erosion of their living standards.
“The easy gains have now been reaped and the last mile is going to be more difficult,” Borio said, referring to challenges central bankers now face reeling inflation back to safe levels. “I wouldn’t be surprised if there were more surprises”.
Source – Reuters
-Agencies
