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null Will Rate Hikes Tank the Economy?

Will Rate Hikes Tank the Economy?
14 Jun 2022
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Clock 15 mins.
CATEGORIES: AER Global AER Personal Spain Global US Europe Macro Global Monetary Policy
Leopoldo Torralba
Ignacio de la Torre
In recent decades, the economic environment is probably one of the most difficult to understand and accurately forecast, and it has the added risk of a wide range of feasible alternative scenarios with rather binary impacts (i.e., an error in one direction or the other can generate very significant economic damage). Thus, the last two weeks have been marked by very considerable abrupt movements in the markets, interest rates, stock markets, currencies, commodities, etc. Rate hikes and stock market plunges have been very pronounced, and their potential impacts may be very significant for all agents in the future.
dot What has transpired over the past two weeks?
dot What is actually inducing fear in the markets?
dot What can we expect moving forward?
dot What might then become of inflation throughout 2023?
dot How can our inflationary scenario affect growth?
dot Are there serious risks of second-round effects?
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