Global central banks have instruments to deal with rising inflation after rolling out unprecedented pandemic stimulus measures, Agustin Carstens, general manager of the Bank for International Settlements, said on Saturday.

• “It is likely that we will see spiking inflation,” Carstens said on Saturday in a panel discussion during the China Development Forum organized by the Chinese government
• This would require central banks, including the Federal Reserve, to revise monetary policies and give more weight to achieving the full-employment goal, he said
• The Federal Reserve will be “extremely watchful” and inflation “will not be a destabilizing factor”: Carstens
• The market needs to listen to the Fed, which has been consistent in saying that it doesn’t have enough information to change policy, he said
• The way to smooth out the path to policy normalization is to ensure dialogue between the Fed and the market, Carstens said
• Carstens doesn’t see major mispricing in markets
• Lack of 100% clarity on bankruptcies over pandemic is a source of concern to him

— With assistance by John Liu, and Yujing Liu