BIS bulletin weighs pros and cons of ‘front-loaded’ tightening
Recent rate increases are highly synchronised and twice as fast as previous cycles, authors say
“Front-loading” rate increases may bring inflation under control faster but also comes with communication challenges, research published by the Bank for International Settlements finds.
The bulletin article, published on December 9, compares recent monetary tightening worldwide with past episodes. Authors Paolo Cavallino, Giulio Cornelli, Peter Hördahl and Egon Zakrajšek say the current episode stands out – rate rises are more synchronous and about twice as fast as previous tightening cycles.
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