Bank for International Settlements president warns: the world has entered an era of high inflation

According to Reuters London April 5th, the head of the BIS warned that with the deterioration of relations between the West and Russia and the reversal of globalization after COVID-19, the world is facing a new era of high inflation and high interest rates.
"A key message is that we may be entering a new era of inflation," Agustin Carstens, President of the bank for International Settlements, said on Tuesday
Carstens added: "we need to accept the possibility that the inflation environment is fundamentally changing. If I am right, the central bank will need to make adjustments."
Carstens pointed out that professionals predict that the inflation rate in the United States and most parts of Europe will exceed 4.5% in the next two years, and that in many other developed economies will exceed 3.5%.
The report said that this directly means that policymakers will have to quickly change their "thinking mode" and turn to how to prevent inflation from getting out of control. Since the 1970s, few people have encountered the problem of runaway inflation.

"The most likely scenario is that this will require real interest rates to rise above neutral levels for some time to curb demand," Carstens said

"Many of the economic challenges we face today stem from the neglect of supply side policies in the past 10 years or more," he said
According to the guardian website on April 5, Agustin Carstens, President of the bank for International Settlements, said recently that the world economy may soon enter a new era of inflation due to the decline of globalization and the continuous rise of consumer prices.
Carstens said that if interest rates are not raised by more than the current plan, price increases are likely to get out of control.
According to the report, Carstens elaborated the risk of continued high inflation in his speech. He said that it may be necessary to raise borrowing costs in the coming years to curb the risk of long-term damage to the economies of industrialized countries caused by rising prices.
However, some experts disagree with him. They warned that high inflation could curb consumer spending and economic growth, reducing the urgency of significantly raising interest rates.
According to reports, the data show that the inflation rate in many countries is close to 10%, mainly due to the rising prices of natural gas and oil after the conflict between Russia and Ukraine. In February this year, the UK consumer price index (CPI) rose 6.2%, the highest level since the 1990s. In March this year, the CPI of Germany and Spain increased by 7.3% and 9.8% respectively.