Thread by @FinTwitNotes

#IMFMeetings Powell: Many on the committee thought it would be appropriate for there to be one or more 50 bps hikes.

Powell: Markets are reacting appropriately generally. We are committed to using our tools to get 2% inflation back.

Powell: Look at last tightening cycle - 2 year string of 25bps hikes. Inflation was a little over 3%.

Inflation is much higher now. It is appropriate to be moving a little more quickly.

50bps will be on the table for the main meeting.

Georgieva: US Fed - 50 bps hikes can lead to currency depreciation for emerging markets as capital flies to safety towards US Dollars .

Lagarde: Core of inflation is supply shock. 50% of it is attributable to rise in energy prices.

Powell: Our expectation was that inflation would peak around this time.

We're no longer going to count on help from supply-side healing.

We're going to be raising rates and getting to levels that are more neutral, and actually tight.

Powell: There are substantially more job openings than people who are unemployed.

There is more than 5 million more demand for labor than supply.

Powell: We control overnight rates + balance sheet.

That affects broader financial conditions:
- Asset prices
- Credit availability
- Risk spreads
- Etc...

Financial conditions affect real economy. We have seen some tightening from our rate increases.

Indrawati: Indonesia aims to reduce its fiscal deficit to just above 3%.

Mottley: We (Barbados) are not seeing rate of economic recovery go up as quickly as we need it to. Tightening of monetary policy will increase cost of servicing debt.

Georgieva: What is the role of the IMF in a global environment where there are shocks attributable to war & natural causes.

Georgieva: Not all problems are exogenous. We still have problems caused by poor judgment in governance and corruption.

Countries should engage in transparency reforms to make themselves more attractive to private investors.

Indonesia has done good reforms.

Powell: The supply chains we had were very efficient but quite fragile.

It's not clear that we're seeing a reversal of globalization. It's clear that it's slowed down and may go in reverse.

Lagarde: Does not think globalization will fully reverse.

Will revisit terms of trade and reorganize supply chains.

Europe is a "laboratory" of a new form of trade, but willing to learn from recent events and make policies more inclusive to all members.

Georgieva: Spirit of cooperation to maintain globalization is apparent amongs emerging markets.

To soon to say that globalization is dead yet.

Indrawati: Language is no longer on efficiency but on security and reliability.

World has enjoyed huge prosperity due to globalization.

Now current mechanism is shaky. Countries must reexamine their policies.

Mottley: Absence of countries that form a global authority. G20 is not representative.

Powell: We have inflation, a war and COVID.

We're probably not going back to the old economy.

We have a very good labor market and it's our job to get it to a better place where supply and demand are closer together.

Georgieva & Lagarde: Mostly worried about the potential risk of further climate shocks.

Georgivea also acknowledges that world leaders have limited attention to cover all issues. Need to prioritize on most important issues.