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The Effect of Rate Rise on Inflation
Debt growth collapsed as it normally would, but so did willingness to spend down cash. Money's been spinning around in a way that made the rate hike have much less impact than I believe it would have had pre-COVID. On net, real growth has come out stronger and inflation is still coming down - although we think 2% will be more of a bottom than a cap. We do think fiscal policy as the way to deal with the recessions is probably politically the more likely outcome,. then let's say moving back in the next recession, more QE, and fiscal policy is a lot more inflationary"