IMF Economist Sees BoJ Rate Hikes as a Positive Game-Changer for Japan
On Friday, Pierre-Olivier Gourinchas, the chief economist of the International Monetary Fund (IMF), participated in an interview with Reuters at the annual economic symposium in Jackson Hole. From a ‘data dependent’ perspective, the Bank of Japan may continue to incrementally increase rates.
The inflation rate exceeds the Bank’s 2% objective.
Inflation expectations have begun to rise, potentially exceeding the target.
The commencement of the Bank of Japan’s normalisation of monetary policy is “certainly a positive development for Japan.”
Additionally, Gourinchas expressed his opinion on the market volatility.
“I think the market overreacted,”
“… we could witness additional instances of market volatility” as a result of rate cuts from numerous central banks, while the Bank of Japan (BOJ) commences to increase rates.
I am uncertain as to the extent to which the Bank of Japan will prioritise his perspectives. Not a great deal, I would say.
He is correct in his assessment that there will be additional volatility in the future. In light of the confirmation by Federal Reserve Chair Powell of a rate cut in September:
