Opinion
‘Softer landing’ more plausible but far from certain
For markets, despite a likely poor macro backdrop, there’s every chance that a steadier rate environment proves a panacea.
Scott HaslemContributorBy this time last year, virtually all 2022 outlook documents were in the bin. The US central bank (the Fed) had signalled imminent near-term rate hikes, previously slated for much later in the year, and Russian troops were amassing on Ukraine’s border.
Hopes of a “soft landing” for growth as post-pandemic inflation peaked were giving way to the reality that sharply higher energy prices and more rapidly rising rates were about to deliver a stagflation-like shock for 2022, with inflation and rates sharply higher and growth sharply lower.
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