Chicago Federal Reserve President Austan Goolsbee on May 20 warned about inflation risks for the Bank of Japan if it continues to delay raising interest rates.
In an interview, Goolsbee stressed that the BOJ faces the risk of being "too late" in tightening monetary policy as consumer prices in Japan are on the rise. "Delaying rate hikes could cause inflation to spiral out of control, destabilizing the economy," he said.
Goolsbee's remarks come as the BOJ maintains ultra-low interest rates while other major central banks, such as the Fed, have aggressively raised rates. However, inflation in Japan has recently shown signs of increasing, putting pressure on the BOJ to adjust its policy.
Meanwhile, Japanese financial markets are closely watching for signals from the BOJ on possible rate changes at upcoming policy meetings.
Goolsbee also noted that the BOJ's decisions have spillover effects on global markets, especially after recent volatility in the foreign exchange market.
