BlackRock Inc. Vice Chairman Philipp Hildebrand said there’s an implicit recognition of higher neutral rates in US Federal Reserve policy as inflation remains sticky on persistent supply constraints.

The former Swiss National Bank president said inflation is slowing and is likely to touch 2% but the question is about where service inflation settles, he told Francine Lacqua in a Bloomberg Television interview on Thursday.

If the dots are connected in what the Fed said, “there’s an implicit recognition that long term, the inflation path and the interest rate path is going to be sticky,” Hildebrand said. “We’re going to likely see a higher neutral rate level. The inflation numbers were slightly adjusted upwards for the next two years to come. That is going to be the real story here.”

Economists and investors have been debating how soon policy makers around the world would start cutting interest rates even as the macro economic situation remains uncertain. The Fed this week maintained its outlook for three interest-rate cuts this year. Chair Jerome Powell demurred when asked whether officials would lower rates at their coming meetings in May or June and repeated that the first reduction would likely be “at some point this year.”

However, in a surprise move, the SNB cut its benchmark rate on Thursday, acting months before peers. European Central Bank President Christine Lagarde said this week that the monetary authority can’t commit to further reductions after a likely first move in June.

BlackRock is the world’s largest asset manager overseeing a little over $10 trillion as of January.

Asked about the jump in gold prices to a record, Hildebrand said it’s linked more to the “risk and uncertainty that are embedded in the global economy” than to any monetary policy decision.

This article was provided by Bloomberg News.