Goolsbee Warns BOJ Delayed Hikes Risk Inflation Spiral as Japan Core CPI Tops 2.7%
Updated
Updated · The Mainichi · May 27
Goolsbee Warns BOJ Delayed Hikes Risk Inflation Spiral as Japan Core CPI Tops 2.7%
5 articles · Updated · The Mainichi · May 27
Austan Goolsbee said the Bank of Japan risks falling behind the curve if it waits too long to raise rates, warning inflation can become much harder to extinguish once it persists above target.
Japan's core consumer prices rose 2.7% in the fiscal year ended March, above the BOJ's 2% goal, and the bank in April lifted its fiscal 2026 inflation forecast to 2.8%.
Speaking in Tokyo before the BOJ's June meeting, Goolsbee also said U.S. rates could still rise if inflation worsens, citing persistent services inflation alongside higher oil prices and tariffs.
He added that central-bank independence remains crucial as political pressure builds in both countries, while arguing currency intervention is costly when it fights market-set exchange rates.
With growth slowing, is Japan trapped between fighting inflation and risking a recession?
As external shocks fuel inflation, are central banks losing their power to control prices?