120: Why Are These Market Events Different From 2008?
The Bid
The Fed and the ECB Face an Inflation Problem
This is a very different episode to 2008 in one other respect as well, which is that we go into this with central banks facing an inflation problem. The playbook where central banks respond both with tools to address financial problems like lending facilities and rate cuts isn't on the table this time. What we think they'll try and do to the extent they can is effectively separate two issues.
As central banks have been trying to control inflation with the fastest rate hikes since the early 1980s, we've begun to see some cracks in the financial system. Most notably the recent collapse of two US regional banks, Silicon Valley Bank and Signature Bank, and the evolving situation around Credit Suisse's liquidity position. Alex Brazier, Deputy Head of the BlackRock Investment Institute is here to tell us why these market conditions are different from 2008 and what investors can expect to see from central banks in an effort to control inflation and protect the financial industry.
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