EDITORIAL: How low can rates go as inflation monster is tamed?
The Reserve Bank is not expected to cut much more than 100 basis points in total
“The global battle against inflation has largely been won,” says the IMF in its latest World Economic Outlook. It projects that global inflation will fall to 3.5% by the end of 2025, from a peak of more than 9% in the third quarter of 2022. In most countries inflation is heading back down to central bank targets, paving the way for monetary easing, it says.
The decline in inflation without a global recession is a major achievement, says the IMF. It does highlight a number of risks, including that we have now entered a world dominated by supply disruptions, and it urges continued vigilance. But it also cautions the risk that monetary policy could become too restrictive and damage growth...
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