Spooked by relentlessly raging inflation in services, ECB puts QT into higher gear.
Bond yields jump as they begin to price in more BOE rate hikes, and higher for longer than previously imagined.
Food Inflation Raged at 19%. But energy prices plunged. In response, UK government bond yields spiked, pricing in higher BOE policy rates.
LOLs keep piling up. Cost of doing business. Nevertheless, Meta came out swinging against it.
“We’re not pausing, that’s very clear,” Lagarde said. “We know we have more ground to cover.”
These nasty surprises just keep coming when inflation is broadly entrenched in the economy.
We’re not even getting peanuts? EU regulators came out and said, no, no, no, that’s just in Switzerland, not in the EU.
A hugely important concept: “There is no trade-off between price stability and financial stability.”
Step 1 of QT is operating at full speed. Step 2 of QT is just starting.
What it looks like when inflation gets deeply entrenched in the broad economy, even as energy inflation backs off.