July 2022 | The greater the gap between what central bankers say and what people believe, the higher may be the cost of bringing inflation under control since significant monetary policy tightening will be needed to rein in expectations about how fast prices will rise. The current collective memory has instead been shaped by an environment where central banks were more concerned about undershooting their inflation targets and were free to act to support growth.
01 | This Month's Topic: The macro financial outlook remains challenging amid growth concerns, still-high inflation and tighter global financial conditions. The current geopolitical environment, with its impact on macro and financial conditions, is making an idiosyncratic crisis more likely.
02 | Thematic: The European Central Bank is determined to tighten its monetary policy in the face of record high inflation levels. This action could cool inflation down, push the economy into recession or trigger a spike in peripheral debt borrowing costs.
03 | Global Research:A sharp economic slowdown seems to be looming in both Europe and theUS, which would make bond markets attractive again, especially in the US. Conversely, the Chinese economy is expected to reaccelerate. International monetary system set to become multipolar as geopolitical factors are likely to prevail.
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