Ahmed clarified these reasons including the drop of headline and core inflation rates
at four-year lows, global monetary easing in advanced and emerging countries, and oil prices which is hovering around $60 for a barrel, in addition to the need to spur private sector and investment, as well as Suez Canal Investment certificates.
Responding to these subpar inflation outcomes, Evans believes the Fed needs to be willing to "communicate comfort with core inflation rates
of 2-1/2 per cent" and to take policy action appropriate to such a strategy.
In January, headline and core inflation rates
both fell to 4.4 percent from 5.1 percent and 4.7 percent in December, respectively.
To check the robustness of the accuracy of the ECB's predictions, we test the hypothesis that the panel forecasts are optimal predictors of future headline and core inflation rates
. Following the Grant and Thomas (Economic Letters, 1999) method, we test whether these panellists made unbiased and efficient predictions considering the observed inflation rate for any time horizon.
Moreover, the interest rate cut is the result of the containment of inflationary pressures, as annual headline and core inflation rates
declined in January 2018 to record 17.1% and 14.4% respectively, dropping from a peak of 33%, and 35.3% respectively in July 2017.
They are creating slack and should be seeing core inflation rates
coming down and that is not happening," says Mr Hensley, who argues that this "stubbornness" in inflation is a major issue for EM governments to tackle.
Core inflation rates
in the last three months have recorded above the CPI and market observers noted inflation will be above 8 percent by year end.
The bottom line is that headline and core inflation rates
are clearly pointing north.
However, after holding it for the last 15 months, the bank may decide to raise interest rates, during the first half of 2011 in response to core inflation rates
, it said.