Rate hikes brought forward, but end point still low

There has been a hawkish shift among many of the world’s central banks over recent weeks as inflation has continued to surprise on the upside. In this Global Central Bank Watch, we assess the reasons for that shift and what they imply for the policy outlook. In some cases, central banks have reacted more strongly to near-term price pressures than we had expected, causing us to bring forward our projected interest rate hikes in several economies. However, we generally do not expect rates to peak at higher levels than we previously assumed and maintain the view that real rates will be negative for several years to come in the major advanced economies.