Inflation is not limited to the United States. It is a global phenomenon prompting central banks worldwide to take action. Central banks worldwide are quickly moving to a more aggressive monetary policy in an attempt to stave off the spiraling international level of inflation. The president of the Federal Reserve Bank of New York, John Williams, spoke to Bloomberg Television saying that a .50% hike in interest rates is a ‘very reasonable option’ for May.
He also addressed the endgame and timeline to achieve interest rate normalization, saying, “We need to get to a more neutral or normal level of the fed funds rate, though whether that would be the end of the year or exactly when will depend on the data... The Fed should get “real” interest rates, nominal borrowing costs minus expected the inflation rate, back up to a more normal level by next year.” Continue reading "Global Inflation Prompts Action By Central Banks"