There is a raft of ongoing debate as to whether the world’s central banks are correct in their assessment that interest rate hikes will help to tame runaway inflation with the war in Ukraine and surging energy prices not helping the cause.
Central banks see hawkish rate hikes as the best hope of taming inflation and have signalled that they will continue to increase benchmark rates until inflation is brought back within each bank’s target band.
The US Federal Reserve wants inflation to be at 2% (currently at 8.3%) and hiked its benchmark rate by 75 bps on Wednesday. Locally, the South African Reserve Bank has a target inflation band of between 3% and 6% with inflation currently at 7.6% and the general consensus is that the SARB will hike the repo rate by 75 bps on Thursday.
We’ve compiled a catalogue of sources who both agree and disagree with rate hiking. Click the links below to read deeper into this story.
- The truth I’m telling Congress today about inflation – Robert Reich
- US bank CEOs back Federal Reserve hikes during congressional grilling on economy, China ties – The Business Times
- Interest rates: UK braces for possible biggest hike in 33 years – Yahoo! Finance
- The Fed’s rate hikes will hurt. That’s unavoidable. – The Washington Post (for subscribers)
- A recession is now likely in 2023. Here’s what could trigger a sharp downturn in the economy – USA Today
- ‘The World Doesn’t Work Like That’ – Seeking Alpha
- Central Banks Near Panic As Inflation Continues Despite Rate Hikes – Investing.com
- End of sub-zero: Europe ditches negative rates as inflation surges – Financial Times (for subscribers)
- MAMOKETE LIJANE: Policymakers cannot avert global recession – Business Day (for subscribers)
- EDITORIAL: Another 75 basis point hike seems on the cards – Business Day (for subscribers)
- The Fed should wait and see — impact of rate hikes on inflation is uncertain – Daily Maverick
- RICARDO SMITH: US Fed now seems more afraid of inflation than markets – Business Day (for subscribers)
- BRIAN KANTOR: The day the market stopped fighting the Fed – Business Day (for subscribers)
- Everywhere you look there is criticism of central banks – Are they responsible for the mess we see now? – FX Street
- Why criticism of the Bank of England is largely misplaced – Financial Times (for subscribers)
- Central bank policymakers should not assume reputations will recover – The Guardian
- Central banks: Too big to fail, but failing yet again – Politico
