Whatever You Do, Don’t Mention the Interest Rate Pivot
Try not to get hung up on labels. Monetary policy is undergoing an important shift.
Hold on for the pivot.
Photographer: Martin Bernett/AFP/Getty Images
It seems 2023 is arriving early. The race to raise interest rates to levels that have a hope of quelling inflation is entering a less punishing phase. It may be only a slight stretch to say the end of the most rapid monetary tightening in at least a generation is coming into view. Here’s hoping the troubled world recovery still has a pulse by the time central banks down tools.
One consequence of tapping the brakes more gently is that the pause penciled in for next year could take longer to materialize. The delay might be a matter of months. I’ll take it. The global economy has slowed significantly; European Central Bank President Christine Lagarde warned Thursday of the “higher likelihood of a recession” and signaled a less hawkish approach is in the works. Investors took the cue and further pushed down global bond yields.