Leading economists and central bankers across major economies continue to signal that interest rates will stay elevated for an extended period. CNBC reports this consensus among financial insiders and policymakers.
The governor of the Croatian National Bank, Boris Vujcic, reiterated that prominent economists and central bankers expect rates to remain high for a prolonged stretch. This outlook reflects a shared view that persistent inflation will take time to move back toward target levels, even as growth slows in many regions.
According to senior policymakers, Europe is likely to experience shocks driven by geopolitical tensions and resilient inflation. Central banks globally have lifted policy rates over the last eighteen months in an effort to curb inflation, yet the effect has been uneven and progress has been incremental.
Vujcic noted that rates are unlikely to ease soon until inflation nears the benchmarks set by central banks. He also highlighted that financial markets have so far been slow to fully adjust to a prolonged environment of higher rates, with price signals and asset valuations gradually incorporating the higher rate regime.
The same sentiment is echoed by leading figures such as European Central Bank President Christine Lagarde, World Bank President Ajay Banga, and the heads of several notable central banks, including those of Austria, Latvia, and South Africa. They concur that despite a cooling in some sectors, high policy rates are expected to remain in place for an extended period to press inflation back toward targets.
Robert Holzmann, governor of the Austrian Central Bank, warned that geopolitical volatility could reaccelerate price pressures, creating a risk that warrants careful monitoring and potential rate adjustments if inflation re-accelerates.
Lagarde recently affirmed the ECB’s commitment to addressing inflation pressures in the Eurozone, underscoring the ongoing vigilance required as the region navigates a softer yet fragile economic environment.
Previously, analysts have discussed how Europe’s crisis dynamics may influence the Russian economy, with potential implications for global financial conditions and energy markets. This broader context remains a key consideration for policymakers assessing risk and policy levers going forward.