veteran economist jim oneill says central banks will need to keep interest rates up around 5 across major economies for longer than the market expects even as inflation subsides the us federal reserve is broadly expected to raise interest rates by another 25 basis points at its next policy meeting in september but market pricing suggests that the central bank will begin cutting in 2024 according to the cme groups fedwatch tool traders will be closely watching the us consumer price index reading later for july on thursday for indications on the feds future rate trajectory economists expect the thursday headline cpi to come in at 02 monthonmonth and 33 annually according to a dow jones consensus estimate while this marks a modest increase from june as a result of higher gas prices it is well below the fourdecade high of an annual 85 notched a year go core inflation which excludes volatile food and energy has remained sticky and is expected to come in at 48 yearonyear in july the core reading has also remained consistently well above target in the euro zone and the uk prompting central bankers to reiterate their commitments to keeping rates high for as long as necessary to bring inflation towards their 2 targets policymakers have largely pushed back on rate cut expectations and oneill senior adviser at chatham house and former chair of goldman sachs asset management agreed that decreases were likely a long way off i have to say in order to deal with the challenge of core inflation coming down and with it the whole overhang of all the stimulus thats accumulated over the past decade plus i think thats right he told cnbcs squawk box europe i dont quite get this view that rates have to automatically start coming back down again in order to have a permanently more balanced world in my view economically we should be keeping rates around the 5 area in most of the developed world because they should have some sort of positive relation to the level of inflation if we want it to be permanently stable oneill also suggested the us is in a decent position to avoid a recession noting that inflation expectations have remained fairly stable given that some of the forces that the fed has been fighting are starting to fade i think its reasonable that certainly this mood and this response of markets is perhaps going to continue for a bit longer he said i do think the trend on inflation is improving in fact i think the next twist is probably going to be more good news for europe rather than the us because weve had a lot in the us recently and its just sort of started in europe