BIS’s Carstens Says Central Banks Equipped to Combat Inflation
(Bloomberg) -- Global central banks have instruments to deal with rising inflation after rolling out unprecedented pandemic stimulus measures, Agustin Carstens, general manager of the Bank for International Settlements, said on Saturday.
- “It is likely that we will see spiking inflation,” Carstens said on Saturday in a panel discussion during the China Development Forum organized by the Chinese government
- This would require central banks, including the Federal Reserve, to revise monetary policies and give more weight to achieving the full-employment goal, he said
- The Federal Reserve will be “extremely watchful” and inflation “will not be a destabilizing factor”: Carstens
- The market needs to listen to the Fed, which has been consistent in saying that it doesn’t have enough information to change policy, he said
- The way to smooth out the path to policy normalization is to ensure dialogue between the Fed and the market, Carstens said
- Carstens doesn’t see major mispricing in markets
- Lack of 100% clarity on bankruptcies over pandemic is a source of concern to him
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