Bloomberg Surveillance · Friday, October 2, 2026
Central banks worldwide are challenged by supply shocks, such as oil prices and chip shortages, which their monetary policy tools cannot directly address. While some inflation is demand-driven, the focus on supply-side issues limits the effectiveness of traditional policy responses.
“I mean, let's put the payroll data aside for a second, because the Fed and other central banks are looking not just at one number, but at a dashboard of numbers when they're making their assessment on labor and inflation. I think the challenge for the Fed, the challenge for all these developed markets, and even a few emerging central banks today, is that a lot of... the pressure coming in are supply shocks. And central bank policy changes can't create a barrel of oil. They can't create more chips, et cetera. So it's hard for them to know how to respond to that.”