Summary : Central banks and markets may have dropped the narrative that inflation is “transitory,” but there is a strong chance that current spikes in prices are temporary and will soon begin to trend downward, economists and former central bank policymakers told the Reuters Global Markets Forum (GMF).
“I’ll confess I’m still in team transitory,” said Stephen Poloz, former governor of the Bank of Canada, referring to the rises in consumer prices. Poloz, however, said that while price rises have lasted longer than markets anticipated due to external shocks, they have likely peaked.
Several economists saw the combination of central banks tightening rates, the increasing likelihood of an economic recession, and commodity prices giving up gains made in the wake of Russia’s invasion of Ukraine, as contributing factors to declining price pressures.
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