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Central banks’ commitment to fight inflation amid banking crisis may raise risk of recession
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Aggressive rounds of rate hikes usually don’t result in an orderly economic slowdown with slower growth purging inflation without causing a recession.
PHOTO: EPA-EFE
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SINGAPORE – Key central banks are probably losing control over the economic fallout amid their unwavering commitment to fight stubbornly high inflation with large interest rate hikes.
If history is any guide, aggressive rounds of rate hikes – or monetary policy tightening, as it is known – usually do not result in an orderly economic slowdown with slower growth purging inflation without causing a recession.
