Supply chain bottlenecks and the Russian-Ukrainian war pushed up raw material prices. Global inflation continued to heat up. The US Federal Reserve and the Bank of England raised interest rates to respond. However, the Central Bank of Taiwan posted on Facebook today to convey the economist’s view that “monetary policy is not A panacea,” bluntly said that if you are not careful, it will lead to a hard landing of the economy. The US Federal Reserve (Fed) raised interest rates by 2 yards on May 4, and is expected to implement Quantitative Tightening (QT) in June; the Bank of England (BoE) also raised interest rates by 1 yards the next day to fight once morest the High inflation.
The central banks of major countries have raised interest rates to fight inflation, but the central bank today posted on Facebook, citing economists, saying that monetary policy is not a panacea.
The central bank said that the tightening action is not easy, and it may lead to a hard landing of the economy if it is not careful, bringing regarding painful high unemployment and rapid economic contraction; Bank of England Governor Andrew Bailey admitted that BoE’s interest rate policy is once morest the Between the expansion and the avoidance of the economy entering a recession, it is facing a great challenge.
The central bank issued a document that the “Economist” has warned recently that if the Federal Reserve will raise interest rates too much, it may lead to an economic recession, and it must be properly managed; even in the face of pressure from all walks of life on the central bank’s high expectations, such as requiring uneven handling , housing prices, climate change and other social issues, but monetary policy is not a panacea. If interest rates are used to deal with these issues, it is a huge and inappropriate tool.
In addition, many major economists believe that in the face of this wave of high inflation driven by supply-side shocks, the toolbox of central banks such as the Federal Reserve does not have tools that can be directly used.
Responsible editor: Yu Weining
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