Global central banks unite in 'higher for longer' credo
By Mark John
(Reuters) — Central banks for the world's biggest economies have served notice that they will keep interest rates as high as needed to tame inflation, even as two years of unprecedented global policy tightening reaches a peak.
The so-called «higher for longer» mantra is now the official stance of the U.S. Federal Reserve, European Central Bank and the Bank of England, as well as being echoed by monetary policy-makers from Oslo to Taipei.
For central bankers first chastised for being late to spot the post-pandemic surge in inflation and then cautioned for overdoing their response, the prize of returning the global economy to stable prices without recession is now within sight.
Their task is to convince financial markets not to undo their work with bets on early rate cuts, and to watch for new risks such as rising oil prices — while hoping governments help with budgets that do not further fuel inflation.
«We will need to keep interest rates high enough for long enough to ensure that we get the job done,» Bank of England Governor Andrew Bailey said on Thursday after policymakers narrowly decided to hold its main interest rate at 5.25%.
U.S. Federal Reserve policymakers had a similar message on Wednesday. They held the Fed's benchmark rate at 5.25%-5.50% but stressed they would remain tough in an inflation fight they now see lasting into 2026.
In Europe, ECB President Christine Lagarde was adamant last week that further hikes for the 20-country euro zone could not be ruled out. The central banks of Norway and Sweden both signalled on Thursday they could hike again, with even the Swiss National Bank holding out the prospect of further interest rate hikes despite inflation at a comfortable 1.6%.
Turkey's central
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