Financial TimesFinancial Times

The future of interest rates is a riddle

By Martin Wolf

18 Apr 2023 · 4 min read

Editor's Note

The return of inflation has changed the world, argues the FT's Martin Wolf. The question is how much. In other words, will it become entrenched or can we return to more moderate price increases?

The return of inflation has surprised many, including central bankers. So has the resulting rise in nominal interest rates. These surprises have brought others with them, notably a mini-shock to banking.

The question, then, is: “What next?” Will inflation subside to ultra-low pre-Covid levels or will it be a lasting problem, as in the 1970s and early 1980s? What, too, will happen to interest rates?

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