In a recent episode of Kathleen Hayes’s podcast Central Bank Central, BWC Member Paul Sheard offers insight into the expected rate hike of the Bank of Japan and the Central Bank’s clear response. According to him, the Bank of Japan has been sending a clear message that there will be more rate hikes coming in the near future, and this will mark the end of its long period of secular deflation. He also addresses the influence of the Fed on Japan’s expected rate hike. Sheard points to Kevin Warsh’s initiative to narrow the scope of the Fed’s global influence as inspiration for fiscal policy to “pick up the slack.” Overall, he claims we ought to pay close attention to how the rest of the world will respond to the expected rate hike of the Bank of Japan.

To listen to the full episode, click here.

All views expressed by members are their own and not reflective of the views of the Bretton Woods Committee.