BIS chief says central banks on cusp of holy grail: a soft landing

Source: Reuters

BIS chief says central banks on cusp of holy grail: a soft landing

Reuters
January 22, 2024 11:35 AM EST Updated 29 min ago

FRANKFURT, Jan 22 (Reuters) - The world's biggest central banks may be on the verge of securing the holy grail of monetary policy: an economic soft landing, despite the sharpest interest rate hikes in decades, the head of a central bank umbrella group said on Monday.

Nearly all central banks increased interest rates at break-neck pace to combat a post-pandemic inflation surge, raising fears they would crash economic growth, destroy jobs and push up unemployment along the way.

But rate hikes are now over, inflation is sinking back to targets and employment has remained strong, insulating the economy from what would have been a sizable hit in previous episodes of policy tightening.

"Economic activity has remained surprisingly resilient, bolstering confidence that economies might be posed for a soft – or at least soft-ish – landing scenario," Agustín Carstens, the General Manager of the Bank for International Settlements said in a speech in Basel.

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Read more: https://www.reuters.com/business/finance/bis-chief-says-central-banks-cusp-holy-grail-soft-landing-2024-01-22/

Alternate no-paywall link: https://finance.yahoo.com/news/bis-chief-says-central-banks-173523666.html