Outside the central banks’ monetary tightening herd are Bank of Japan, which has been persistently sticking to negative interest rates despite growing concern about inflation
SINCE late 2021, central banks in advanced and emerging economies have aggressively hiked their interest rates to fight high and persistent inflation. Both headline and core inflation in many countries rose to the highest levels in decades.
The surge in inflation during the pandemic recovery was driven by key factors including supply disruptions, high energy and commodity as well as industrial materials prices following the persistent military conflict in Ukraine, and massive monetary and fiscal stimulus that fuelled consumer spending on housing, automobiles and durable goods.
