Report
Patrick Artus

What should central banks do if there is a new shock to commodity prices and a stagflationary process in economies?

The conflict in Ukraine will give rise to a new shock to commodity prices (oil, natural gas, metals, wheat, etc.). In the United States and especially in Europe, there will therefore be a further surge in inflation and a further decline in the purchasing power of wages. So how should central banks react to this stagflationary process ? As this shock has nothing to do with monetary policy and causes growth to decline, central banks’ normal response is a more expansionary monetary policy, and therefore a postponement of monetary policy tightening.
Provider
Natixis
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.

 

Analysts
Patrick Artus

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