Leaders of major global central banks warned of growing, long-term inflationary pressure stemming from the Middle East conflict.
Traders are now betting on at least one Federal Reserve rate increase this year, compared to projections a month ago of policymakers holding firm or even lowering borrowing costs, with the president of the Chicago Fed telling CNBC that “inflation has not proved as temporary as was advertised.”
The Bank of Japan’s governor, meanwhile, suggested that what may have initially been a short-term impact on prices “can become persistent if it changes wages, expectations, and price-setting behavior,” and the European Central Bank’s chief economist warned that “second-round [effects] will be with us for a while.”
