Hiking Rates Early Won’t Mean Catching a Break Later
The few central bankers who spotted inflation risks quickly won’t get credit if they need to ease back as recession looms.
Governor Rhee Chang-yong after the Bank of Korea raises its key rates by half a point.
Photographer: SeongJoon Cho/BloombergSuch is the determination these days to look tough on inflation that to even risk being portrayed as dovish is a stigma, regardless of merit.
The relentlessness with which many central banks are raising interest rates into a slowing global economy shows there’s little reward in modest, albeit consistent, steps. No matter whether the officials in question were among the first to begin withdrawing pandemic-era stimulus. The consequent risks of overdoing it and being forced into an about-face and cutting in 2023 — or earlier — are mounting.