IMF chief economist Pierre-Olivier Gourinchas spoke in an interview with Reuters at the Jackson Hole annual economic symposium on Friday. Saud the BoJ can continue to raise rates gradually, a ‘data dependent’ pace:
- inflation is higher than the Bank’s 2% target
- inflation expectations have started to move “maybe even a little bit above” that target
- BOJ’s beginning to normalise monetary policy is “certainly something that we think is a good development for Japan”
Gourinchas also weighed in with his two cents on the market volatility:
- “I think the market overreacted,”
- “… we could see other episodes of market volatility” due to rate cuts from many central banks while the BOJ begins to raise rates
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I don’t know how much attention the Bank of Japan will give his opinions. I suspect not much.
He’s right about more volatility to come at least. With Federal Reserve Chair Powell confirming a September rate cut:
And the BoJ hiking, plenty more to come.
