LONDON — Overcoming doggedly high inflation requires interest rates to be pushed into the “pain zone.” Man Group, an investment manager, says it’s a question of whether any central banks have the courage to make this happen.

CNBC’s Geoff Cutmore heard CEO Luke Ellis say that “to actually combat inflation, a central bank must show they’re willing rate to the pain zone.”

The Federal Reserve should find it relatively easy to accomplish this task, given the strong real- and nominal growth backdrop in the U.S. However, for the European Central Bank which is fighting a weak growth environment, it’s a bit more difficult, he admitted.

Still, Ellis said he doubted that even the Fed would have the conviction to move aggressively enough this year — especially as headline inflation figures show signs of tapering off and U.S. midterm elections approach in November.

He said, “I personally doubt that Fed will act so aggressively in the course of the year to raise rates high enough to cause the pain this fiscal year,”

Consumer prices in the United States rose 8.5% in MarchHowever, core inflation showed some signs of improvement and may soon reach its highest level for three decades. Ellis indicated that it might drop to 5-6% before the year’s end.

He explained that this means inflation continues for longer which leads to greater end pain. But it is a question of whether they will have the guts to actually drive the rate up enough to stop inflation.

Accordingly, the manager of the fund advised investors that they position their portfolios to undergo an “extended period of tightening.”

Stocks that are discretionary, such as NetflixParticularly, the economy, which is under severe pressure by post-pandemic consumer price cutting, may be facing a bumpy ride, he said.

Netflix is a great company with unlimited pricing power.