Quote:
Originally Posted by opendoor
But there are several countries that started raising rates in mid to late-2021 and it did little to nothing to curtail their inflation. These countries started raising rates in:
May 2021:
Iceland: currently at 9.3% inflation, slightly down from their 9.9% peak.
June 2021:
Mexico: currently at 8.7% inflation which is their peak.
August 2021:
South Korea: currently at 5.6% inflation, down from their July peak of 6.3%.
Czech Republic: currently at 18% inflation
September 2021:
Norway: currently at 6.9% inflation which is their peak.
October 2021:
New Zealand: currently at peak inflation of 7.3%
Poland: currently at peak inflation of 17.2%
I mean, is there a single instance of an industrialized country raising rates in 2021 and then largely escaping inflation pressures? I can't think of any. The ones that have maintained relatively low inflation are also countries which have suffered from deflation risks in recent years/decades and had (or have in some cases) negative interest rates until very recently.
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Everyone knows that there are a bunch of other issues causing inflation, notably: Ukraine/Russia conflict, supply chain issues, China's economic and manufacturing slowdown, distribution of free money during Covid, etc...
Raising interest rates at this stage still seems necessary to stop inflation from ballooning even further.