24 Top Central Bankers Unsettled by Shifting Sands of Inflation
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24 Established 1961 News Monday, February 24, 2020 Top central bankers unsettled by shifting sands of inflation RIYADH/WASHINGTON: Central Christine Lagarde and Bank of Japan pursue 2 percent inflation using tools such allow inflation to run above target to make up rising cost of prolonged low interest rates, bankers from the United States, Japan and Governor Haruhiko Kuroda to compare notes. as forward guidance. In its own review, the for times of weakness in the economy. from soaring property prices to vanishing the euro zone meeting in the desert king- Lagarde was due to meet Powell later yester- ECB is all but certain to overhaul its inflation But that would tie the hands of future returns for pension funds, means central dom of Saudi Arabia this weekend had their day, having had a brief exchange with Kuroda goal, defined as a rate of price growth policymakers - a risky strategy. “It works banks cannot just stand by hoping inflation own shifting sands to cross - those of elu- the previous day. “below but close to 2 percent,” to signal it beautifully in models,” Thomas Barkin, will perk up some day. “The side effects are sive inflation. The problem facing all three is “The major central banks all face similar does not see that level as a ceiling. Inflation president of the Federal Reserve Bank of more acute now and I think we should tone that price growth has long stopped behav- problems, including how to deal with another can be economically and politically destruc- Richmond. “It makes me nervous in prac- down our communication that benefits far ing as expected, as aging populations and economic downturn,” said an executive of one tive if prices rise too fast but a moderate tice.” Many BOJ officials, too, are wary of outweigh the costs,” an ECB policymaker technological advances prevent inflation of the banks present at the G20 meeting. pace, such as 2 percent, is seen as needed to doing another framework review and doubt said on condition of anonymity. from meeting their cherished 2 percent tar- “They’ve been discussing this topic for a enable companies to raise wages and create any tweak to the inflation target will help Rejecting the idea that interest rates get despite aggressive stimulus measures. while. It’s about time they come up with some a virtuous cycle for the economy. people believe more strongly that prices could stay low forever, IMF Managing This is leading to a deep rethink by the form of conclusion,” he said on condition of Critics doubt whether tweaks to the defi- will rise. “There are doubts within the BOJ Director Kristalina Georgieva likened poli- world’s most powerful central banks, starting anonymity due to the sensitivity of the matter. nition of price goals would be effective in on whether pledging to achieve higher cymakers’ complacency to a frog who from how they define their goal and what Kuroda has plenty of lessons to offer on battling headwinds from demographics and inflation could change public perceptions doesn’t realise it is swimming in gradually tools they use to achieve it - a process that the dangers of keeping subdued price technological innovation. Older populations dramatically, especially if inflation is still heating water until it is too late. “This is the was becoming even more urgent as the world growth unattended for too long. He tend to consume less while new technologies distant from the current target,” said a risk that we are facing,” she told a confer- braced for the economic fallout of the coron- deployed a heavy dose of stimulus in 2013, foster greater efficiency at a lower cost. source familiar with its thinking. ence this week held on the sidelines of the avirus outbreak. The meeting of finance lead- only to see inflation stagnate at levels well Together they can be powerful forces leaning With no clear breakthrough on other G20 meeting. “That an incremental pileup ers from the world’s 20 top economies in below its 2 percent target. Mindful of such against inflation. To tackle this, the Fed has tools central banks have at their disposal, of debt in a low interest environment Riyadh provided a chance for Federal Reserve dangers, the Fed is in the midst of its frame- looked into ideas such as a “make up strate- managing public expectations is now doesn’t give us a good signal to ... jump out Chairman Jerome Powell, ECB President work review that focuses on how it should gy,” under which a central bank promises to among their strongest weapons. And yet the of the boiling water.” — Reuters snow-covered villages in Van province. In Both Iran and Turkey sit on top of major Iran quake kills Gurpinar village, search and rescue teams tectonic plates and see frequent seismic activi- were seen on top of the rubble pile, watched ty. In Nov 2017, a 7.3-magnitude quake in by anxious locals. Iran’s western province of Kermanshah killed nine in Turkey Van, which was hit by a 7.1 magnitude quake 620 people. In 2003, a 6.6-magnitude quake in in 2011 killing more than 500 people, was southeastern Iran decimated the ancient mud- ISTANBUL: A magnitude 5.7 earthquake in struck by tragedy again this month when two brick city of Bam and killed at least 31,000 northwestern Iran yesterday killed at least nine avalanches left 41 people dead. Health Minister people. Iran’s deadliest quake was a 7.4-mag- people in neighboring Turkey and injured Fahrettin Koca said 37 people were injured and nitude tremor in 1990 that killed 40,000 peo- dozens more on both sides of the border, nine of them were in critical condition. He said ple in northern Iran, injured 300,000 and left authorities said. The epicenter of the quake, that 25 ambulances, one rescue helicopter and half a million homeless. which struck at 9:23 am (0553 GMT), was near teams of medics were rushed to the quake In December and January, two earthquakes the Iranian village of Habash-e Olya, less than region. Turkish officials said some schools were struck near Iran’s Bushehr nuclear power plant. 10 km from the border, according to the US also damaged in several villages. Iran’s Gulf Arab neighbors have often raised Geological Survey. The earthquake had a The impact of the quake in Iran was less concerns about the reliability of the country’s depth of six kilometers, said Tehran severe, according to latest reports. It injured at sole nuclear power facility, which produces University’s Seismological Centre. least 51 people in Iran’s West Azerbaijan 1,000 megawatts of power, and the risk of In Turkey, it was felt mostly in the eastern province, 17 of whom had been hospitalized, radioactive leaks in case of a major earthquake. district of Baskale in Van province on the Iran the country’s emergency services said. The Turkey is also prone to earthquakes and over border. Interior Minister Suleyman Soylu said same source also said there was damage to 40 people died in January after a 6.8-magni- nine people were killed, speaking to reporters buildings in 43 villages. Yesterday’s earthquake tude quake struck Elazig in eastern Turkey. In from the quake scene in Van. Four of the dead was felt in several Iranian cities, including 1999, a devastating 7.4 magnitude earthquake were children. “We have right now no citizens Khoy, Urmia, Salmas and Osku, state media hit Izmit in western Turkey, killing more than BASKALE, Turkey: A Turkish child kneels by a destroyed house in Van province after an trapped under the rubble,” he said. Images reported, citing West Azerbaijan’s crisis man- 17,000 people including about 1,000 in the earthquake struck northwestern Iran yesterday. — AFP showed collapsed adobe houses in several agement center. country’s most populous city, Istanbul. — AFP could face sweeping losses. out of Air Force One’s way on the runway at Sanders sweeps Trump on Saturday issued a sarcastic-sounding Walls, mud packs, Ahmedabad airport. “In the past 10 days, we have congratulations on Twitter to the man he calls “Crazy caught 45-odd monkeys. They come in search of food,” Bernie”. Asked if the Democrats’ majority in the House monkey removal Raag Patel from the Nature Conservation Foundation Nevada; Biden... of Representatives might be threatened if Sanders said. The captive monkeys are put in cages with food, turned out to be Trump’s rival in November, one power- sent to a “distant location” and released, Patel said. Continued from Page 1 ful South Carolina Democrat said that it might. for Trump in India Next stop for the Trumps will be sunset at the Taj It “would be a real burden for us in these states or Mahal in Agra, south of New Delhi, and here too work- The 78-year-old senator was leading the congressional districts that we have to do well in,” said Continued from Page 1 ers have been busy making the world-famous Islamic Democratic pack with 46 percent of the vote, followed James Clyburn, the House Democratic whip. “In those mausoleum more beautiful still. Back in the 17th centu- far behind by former vice president Joe Biden at 19.6 districts, it’s going to be tough to hold onto these jobs if attempt to conceal reality. “So Modi has supposedly ry, some 20,000 laborers, sculptors, calligraphers and percent and Pete Buttigieg, the former mayor of South you have to make the case for accepting a self-pro- made everything good and there’s development every- stone cutters, along with 1,000 elephants, took 16 years Bend, Indiana, at 15.3 percent.