“Soft landings” are easier to find in the legendarium of central banks than in historical reality.
It was a big week for interest rates. The Federal Reserve’s supersized rise was followed by the
move to increase borrowing costs for the first time since 2007. Both went further than was expected a week ago. The odd one out was the Bank of England, which nudged rates up less than expected after forecasting a 0.3% contraction in British output in the second quarter.
Consumer sentiment indicators are plummeting across most developed countries. After data showed U.S. inflation hitting 8.6% in May, expectations of inflation a few years down the road actually dipped further. Stocks have plunged into a bear market, and investors have appeared to give up on the notion of a more…
