Report
A “middle road” monetary policy
Central banks (in the United States and Europe) are now faced with high inflation and the ever-increasing likelihood that it will become permanent. They can then choose between two extreme solutions: Not react in order to not spark a recession or force governments to conduct a more restrictive fiscal policy; React strongly to suppress the inflation, which would require very high interest rates and a break from previous monetary policy. They will probably choose a “middle road” solution: react to inflation, but not as much as would be needed to really combat it. This choice will lead to: Higher interest rates than currently expected; Inflation remaining above the central banks’ normal inflation target s .
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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