The inflation trade-offs facing central banks amid supply shocks and AI investment

Nikkei Asia reports that central banks face a difficult choice: raise rates to contain inflation or risk further slowing growth. Conflict-driven energy costs and AI investment are adding to price pressures. The IMF called for restrictive policy, while Bank of Korea Gov. Shin Hyun-song said a stronger currency could help households’ purchasing power. A Moody’s Analytics economist said conventional rate policy has limited power against supply-driven shocks.