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Originally Posted by supafamous
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Yes, because you need to raise interest rates higher to kill inflation. If inflation is not killed now, it will cause reinflation and even more increases will be needed.
Look at the USA. They paused once and now everything is rocketing back up. Mortgages sought are at all time highs. Does that not cause further inflation?
There is a LOT of people sitting right now on the sidelines just waiting to buy real estate and or goods and services.
Why are rate hikes required to kill inflation? It's because they want unemployment to go up. Less tighter labour market = less demand for goods and services = less inflation.
Central bankers always talk about a resilient labour market. On the camera lens they say soft landing labour market is ok. But on the deeper side. They want people to lose their jobs.