While policymakers have raised borrowing costs aggressively to tame consumer prices, the easing in inflation pressures seen so far has primarily been due to supply chains recovering and commodity costs falling.
The unprecedented cycle of global interest-rate increases is entering its most challenging stretch as inflation threatens to become entrenched, according to the Bank for International Settlements.
“Despite the most intensive monetary policy tightening in recent memory, the last leg of the journey to restore price stability will be the hardest,” the Basel-based institution said in its annual economic report published Sunday. “Interest rates may need to stay higher for longer than the public and investors expect.”
