Good news is bad news
Mar 09, 2023
Economic trends in the manufacturing and service sectors have been improving worldwide in 2023 and are now solidly in expansion territory (index above 50). This is a positive sign for economic growth to come but creates a dilemma for central banks who need to tighten financial conditions in order to fight inflation. For as long that there are no signs of an economic slowdown, central banks can afford to inflict more pain and stay hawkish: we expect more rate hikes to come.