Interest Rates

OECD warns Fed, ECB and major central banks not to halt fight on inflation too early

The OECD’s warning comes as the European Central Bank (ECB) and the Federal Reserve begin to shift away from aggressive tightening and signal their next moves will be to cut rates

The OECD has warned policymakers at central banks such as the ECB not to cut rates too early. Picture: Thomas Lohnes/Getty Images

The world’s major central banks must continue their fight against inflation and not cut rates before recent hikes are shown to have contained underlying price pressures, the OECD said.

Global economic growth is proving more resilient and inflation in the US and Europe is easing faster than the organization expected in its November outlook. But it warned that factors helping that process, including improvements in supply chains and commodity costs, are dissipating or even reversing.