IMF economist sees risks that inflation expectations climb upward -Reuters interview
2022.04.20 01:00
FILE PHOTO: International Monetary Fund logo is seen outside the headquarters building during the IMF/World Bank spring meeting in Washington, U.S., April 20, 2018. REUTERS/Yuri Gripas
By David Lawder and Andrea Shalal
WASHINGTON (Reuters) – The International Monetary Fund’s new chief economist said on Tuesday he is concerned about increasing signals that inflation expectations are on the rise and may become entrenched at elevated levels, prompting more aggressive monetary policy tightening in advanced economies.
Pierre-Olivier Gourinchas, who started transitioning to the IMF’s economic counsellor role in January, told Reuters in an interview that the war in Ukraine, which is causing energy and food prices to spike, may damage expectations for decades-high inflation to start to subside this year.
A “very, very tight labor market” in the United States is increasing demands for wage increases to “catch up” with higher prices that could help entrench inflationary expectations, the French-born former University of California-Berkeley economist said.
