Caught in a Trap? What do Central Banks Do Next?
Inflation is still rampant. Sure, it’s coming down but not so quickly, and yet interest rates continue to rise, but (apart from the US) growth is weak. The euro and sterling are faltering; the dollar remains ascendant. Markets are hoping the central banks have got their acts together, but betting that they don’t. Bond yields are up and the great debt bubble, inflated over the past ten years, threatens to burst, catching the central banks in a trap of their own making. Is there a way out? Or , as in the 1980s, will they engineer a global recession to bring inflation under control? Big decisions, huge consequences. A monumental few months ahead.