Central banks to shift away from ‘jumbo’ interest rate rises as outlook darkens

Financial Times/Valentina Romei/11-14-2022

“The US Federal Reserve, European Central Bank and Bank of England had given a ‘clear signal’ that ‘we’re coming towards a period of slower tightening, mirroring what we’ve seen from Australia, Canada and Norway’, said James Pomeroy, an economist at HSBC.”

USAGOLD note: What Financial Times suggests is more a central banks’ downshift than applying the brakes. Though the impact is not likely game-changing, it indicates a willingness to moderate its approach in the face of recession concerns. It is difficult to know with the information available if Pomeroy’s views are on the money or a case of wishful thinking. At the same time, we continue to believe that should a financial or economic crisis develop, central banks would reverse policy quickly without too much in the way of regrets, as the Bank of England recently demonstrated.

ramriez cartoon on the Fed making a slight overcorrection on inflationCartoon courtesy of MichaelPRamirez.com

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