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Growth, debt, banks: the shock of rising rates

2023-03-21T19:52:07.345Z


DECRYPTION – The tightening of monetary policy by the Fed and the ECB has caused fragile players such as American regional banks and Credit Suisse to fall. The whole economy is slowing down.


An express withdrawal, with painful consequences.

By starting to raise their key rates last year - in March for the US Federal Reserve (Fed), in July for the European Central Bank (ECB) - the monetary authorities put an end to a long cycle of renting the low or zero money.

For twelve years, from 2009 to 2022, households, companies, financial investors, States, in short, all economic players, had become accustomed to borrowing cheaply, whether to buy housing or to invest, to betting on the stock market or incurring new public expenditure.

The backlash today is brutal.

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To counter galloping inflation, the central banks have decided to raise their key rates very quickly.

We have to go back to the 1980s, also marked by a determined fight against inflationary slippages, to find such a rhythm.

In a world heavily indebted after years of magic money - global debt…

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Source: lefigaro

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