![]() ![]() ![]() Credit conditions were already tightening before the bank turmoil, and we expect them to tighten further. These include housing, industrial and consumer indicators. More damage is emergingĪcross a swath of different measures, we are seeing economic damage emerge. We see the banking tumult as a manifestation of the damage and financial cracks that we’ve said would appear from such rapid rate hikes. In this regime, central banks face a sharper trade-off than they have experienced in the past four decades, between crushing growth or living with higher inflation.Ĭentral banks are deliberately causing recessions by hiking interest rates to try to rein in inflation. Over the past 18 months or so we have been flagging that the new regime of higher macroeconomic and market volatility is playing out and that a new investment playbook is necessary.
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