This week was another central bank week, with US, European and Australian central banks all hiking rates. The similarities end there, however, with the US Federal Reserve signalling that it is more or less done while the European Central Bank warned of more to come. We’re seeing a clear pattern of the US being about six months ahead of everyone else in the fight against inflation.
Elsewhere the pressure on smaller US banks continued as another Californian bank toppled before being taken over by a larger rival. There doesn’t seem to be an imminent banking crisis but conditions are difficult. With fewer people wanting to borrow money at high interest rates, banks are struggling to pay high rates on their deposits with the inevitable result that savers take their money elsewhere. Although not yet a crisis this is a bad sign for the economy. With less lending going on now, we can expect less economic activity later on.
Read what the team at Financial Express consider to be significant over the current week.