The global economy has faced numerous challenges such as pandemic shutdowns, supply chain shortages, and war in Europe. These factors have caused the economy to struggle and be burdened with debt from stimulus efforts and inflation caused by rising costs. Furthermore, there are market distortions generated by government policies that pose a risk. To combat the rise in prices, central banks have raised interest rates at an unprecedented pace, including the U.S. Federal Reserve raising rates by 475 basis points, the Bank of Canada by 425 bps, and the European Central Bank by 350 bps. While this monetary tightening has helped to slow inflation from its peak, prices are still above target levels, and central bankers must navigate the challenge of managing a slowing growth amidst choppy cross-currents.
Learn more here: https://www.edc.ca/en/weekly-commentary/global-economy-stuck-in-doldrums.html
