As rising long-term interest rates become a challenge for the global economy, former senior officials of the Bank of Japan and the IMF are warning of the need for monetary tightening to curb bubbles. Inflation, fiscal expansion and competition for AI investment are behind the trend.
Rising long-term interest rates have become a challenge for the global economy. In advanced economies, factors including inflation, fiscal expansion and competition for funding to meet demand for AI investment are overlapping, making how to interpret and respond to this situation the focus of debate.
Economic policymakers, including those at the Bank of Japan, are exchanging views on policies to tighten financial conditions and contain the rise in interest rates. Yamaguchi Hirohide argues that monetary policy should be tightened to curb the overheating of bubbles.
The article also introduces the views of Nikkei experts and former senior officials, and reports that discussions are continuing on the impact of long-term interest-rate trends on the global economy and monetary policy.
This debate is an important issue in assessing how interest-rate trends in markets centred on the United States and Europe will affect the stability of the global economy.