Global: The old monetary horse
Structural changes mean that inflation rates are likely to remain low. That makes it more challenging for central banks to meet their inflation goals without creating financial stability risks. This is what monetary policy needs to focus on. The current backdrop of solid employment and GDP growth creates a window in which to raise short-term interest rates without an adverse impact on prices. If central banks really want to see inflation move up they’ll need to persuade their political masters to address the problems of low productivity and demography.