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Guessing game on inflation
Will the public and central banks ever be aligned on inflation expectations?
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A shopper walking past a bread aisle at a supermarket in Mustafa Shopping Centre, on June 20, 2022.
PHOTO: ST FILE
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As inflation around the world surges to levels unseen in decades, some consumers are not convinced that raising interest rates - even though monetary policymakers everywhere are supersizing their rate hikes - can tame soaring prices.
In the United States, median short-term inflation expectations have risen to their highest level on record. This is not helped by a lack of knowledge - a recent The Economist/YouGov poll showed that twice as many Americans believe that higher rates raise inflation rather than reduce it.
