Leading central bankers "almost" with one voice

Several of the world's top central bankers said on Wednesday that resilient economies were keeping inflation too high and further tightening of monetary policy would be needed.

"Although the policy is restrictive, it may not be restrictive enough and has not been restrictive for an exceptionally long time" – said Federal Reserve Chairman Jerome Powell at a conference in the Portuguese resort of Sintra.

His comments on inflation were largely echoed by the CEO Bank of England Andrew Bailey (Goldman Sachs expects the Bank of England to deliver another 50 bp rate hike at its meeting in June) and CEO European Central Bank Chrisitne Lagarde, who also said they expect further moves.

The exception was the leader Bank of JapanKazuo Ueda, who said the central bank did not raise interest rates because core inflation in his country remains low.

Lagarde, responding to questions about stopping interest rate hikes, said that:

"We're not considering it at the moment. (…) another rate hike in July seems very likely”.

In turn, asked if officials Fed they now predict they will raise interest rates every other meeting after skipping a hike this month Powell said that may or may not happen and that he does not rule out more rate hikes.

It all depends on inflationary pressure

The Fed chief spoke two weeks after he and his colleagues left interest rates unchanged after 15 months of hikes to allow more time to assess how higher borrowing costs and recent tensions in the banking sector are hitting the economy.

Ale Powell and most of his colleagues are signaling that further monetary policy tightening will eventually be necessary to contain an inflation rate twice as high as the Fed's 2 percent target. The median of forecasts released at this month's meeting showed that Federal Reserve (Fed) officials expect their reference rate to increase by another half a point this year from the current range of 5-5,25%, which would suggest further  two increases of 25 basis points. The Fed chairman added that he did not expect core inflation to return to the 2% target before 2025.

The Fed's message is in line with suggestions from central bankers in Europe and beyond that further rate hikes may be needed if inflationary pressures persist.