The 2024 Bund Summit in Shanghai wrapped up on Saturday, bringing together former central bank officials from the U.S., Japan, and Europe to discuss the current landscape of global monetary policies.
Donald Kohn, former vice-chairman of the U.S. Federal Reserve, announced that the Fed is shifting from a restrictive stance to an easing approach. He highlighted that while inflation has significantly decreased over the past few years, it still hasn't reached the Fed's 2% target. Additionally, the U.S. labor market has stabilized, moving away from the extremely tight conditions of 2021 and 2022.
Jean-Claude Trichet, former president of the European Central Bank (ECB), emphasized the rigorous measures taken to control inflation. He noted that the ECB has raised rates 10 times compared to the U.S.'s 11 increases. Despite these efforts, core inflation in Europe remains above the 2% target, with current figures at 2.8%.
Kuroda Haruhiko, former governor of the Bank of Japan, provided insights into Japan's unique inflation dynamics. After overcoming a 15-year deflation period, Japan experienced fluctuating inflation rates around 1% until the Ukraine conflict in 2022 triggered a rise to 3%. In response, the Bank of Japan is normalizing its monetary policy by gradually increasing the short-term policy rate from -0.1% to 0.1%, aiming for a neutral rate between 1% and 2%.
These discussions at the Bund Summit highlight the diverse approaches central banks are taking to navigate the uncertain economic outlook and manage inflation while supporting labor markets.
Reference(s):
cgtn.com
