MNI: Better Central Bank CPI Forecasts Shield Autonomy- IMF

Central bankers must improve their inflation forecasting to maintain public trust and protect themselves from political interference, International Monetary Fund chief Kristalina Georgieva said Thursday, a task complicated by higher global tariffs and large trade imbalances.

"Building public trust also requires further enhancing the quality of inflation forecast, which has been more challenging in a shock-prone world," Kristalina Georgieva wrote in a policy agenda report during annual meetings in Washington.

Divergence in global monetary policies is poised to take hold in response to tariffs creating different economic shocks, her report said. "In countries imposing tariffs, central banks will likely face a sharper trade-off between price stability and output. Conversely, in countries facing tariffs, gradual easing may only be feasible once disinflation is firmly established. Exchange rates should continue to act as a shock absorber, where applicable." (See: MNI INTERVIEW: Further BOC Cut Unclear In Trade War Fog-Mendes)