According to the Bank for International Settlements (BIS), central banks can afford their loose monetary policy despite the current sharp rise in inflation. This is the result of a study published by the BIS in Basel. Much of the price change is concentrated in a few sectors of the economy in an environment with low long-term inflation, he said. This suggests that the recent sharp rise in inflation is a transitory phenomenon.
The bank of central banks, as the BIS is also called, supports the arguments of many large central banks. For example, the US Federal Reserve and the European Central Bank (ECB) do not consider the current rise in inflation to be sustainable and therefore wish to leave their monetary policy relaxed. They dispute the special conditions attached to the crown and the statistical effects due to the low comparative values of the previous year. Not all experts share this point of view.
In its study, the BIS looked at price trends in 131 sectors of the US economy over a long period of time. He believes that the results can in principle be transferred to other economies. To illustrate its results, the BIS uses a musical comparison: just as a credible conductor of a well-established orchestra can afford to conduct with minimal movement, a credible central bank can afford inflation within a range. wider than its target without letting any vigorous adjustments oscillate.