Here's Why Inflation Could Be A Bigger Problem in 2025
Nov 29, 2024
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Daniel Moss, a Bloomberg Opinion columnist known for his insights on economic trends, joins host Stephen Carroll to delve into inflation expectations for 2025. They discuss the cautious steps central banks are taking as inflation levels near target rates, and how trade tariffs and a strong dollar may complicate future forecasts. Moss also examines whether recent declines in inflation are merely temporary or signal a new period of sustained inflation, shedding light on the evolving monetary policy landscape.
Central banks are cautiously optimistic about declining inflation rates but remain vigilant due to potential future economic challenges and uncertainties.
The evolving economic landscape may require central banks to adapt their strategies, especially regarding trade tariffs and potential policy changes influencing inflation.
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Central Bankers Navigate Inflation Challenges
Central bankers are cautiously optimistic as they observe a decline in inflation rates toward their targets but remain vigilant about potential future challenges. Although inflation has significantly decreased since its peak in 2022, uncertainties regarding political actions, such as tariffs and fiscal policies, could influence economic stability moving forward. Insights suggest that inflation might stabilize around 2.7 to 3%, but any measurement exceeding 3% could raise concerns among economists and policymakers alike. The constantly changing economic landscape necessitates that central bankers adapt their strategies, possibly considering new frameworks to handle emerging challenges more effectively.
Central banks in the US and Europe have been cutting interest rates as inflation slows close to their 2% target. But while the price surge of 2022 is behind us, the outlook for the next year looks less certain. How will trade tariffs, a strong dollar or other shocks affect the outlook for prices? Bloomberg Opinion columnist Daniel Moss joins host Stephen Carroll to discuss.