Saturday, June 22

Tag: macroeconomic

Aggressive rate hikes could cause financial market accidents

Aggressive rate hikes could cause financial market accidents

economy, Learning
For macroeconomic forecasters, the question has shifted from whether we will see a recession in major developed economies to when it will occur and how severe it will be. Aggressive rate hikes, if implemented without proper caution and consideration, have the potential to cause financial market accidents and exacerbate economic downturns. Central banks play a crucial role in managing monetary policy and interest rates to balance economic growth, inflation, and financial stability. While raising interest rates can be a tool to curb inflationary pressures and prevent asset bubbles, it needs to be done gradually and with careful monitoring of market conditions. Sudden and significant rate hikes can have adverse effects on various sectors of the economy. They can increase borrowing costs...