Global rate rises are happening on an unprecedented scale
Their cumulative impact may be greater than expected
The great tightening began in the spring of 2021, when a handful of central banks in Latin America and central Europe began putting up interest rates to calm their wobbling currencies and rein in inflation. By the end of the year, a few rich countries, like Norway and South Korea, had joined in the action. Over the course of this year, nearly every major economy has jammed on the brakes. In the past five decades, policy has never tilted so overwhelmingly towards rate rises (see chart).
This article appeared in the Finance & economics section of the print edition under the headline “The great tightening”
Finance & economics October 1st 2022
- Financial markets are in chaos. What next for the real economy?
- Global rate rises are happening on an unprecedented scale
- Japan’s monetary policymakers are sticking to their guns
- The world enters a new era: Bail-outs for everyone!
- Investment banks are sharpening the axe
- Economists now accept exchange-rate intervention can work
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