Policy in a time of conflict: Central banks and the growth-inflation trade-off

Pity the poor central banker. As energy prices surge, they are grappling with the trade-off between growth and inflation, while trying to communicate this all to markets without triggering an unwanted tightening in financial conditions.

At the end of an unusually busy week for policy meetings, Group Chief Economist Neil Shearing and Chief Global Economist Jennifer McKeown assess how central banks are managing this difficult task, and whether investors are right to position for rate hikes from some banks that only a few weeks ago were expected to ease policy this year.

In the latest episode of The Weekly Briefing, they talk to David Wilder about issues including:

• How inflation risks in the global economy are crystallising as the conflict approaches its fourth week
• What separates central banks, from the Bank of England and ECB to the BOJ, RBA and the Fed, in how they are likely to respond
• Whether interest rate cuts would come back onto the table if the fighting were to end

Join our 26th March online briefings about our new macro and market forecasts: https://www.capitaleconomics.com/events/drop-global-economic-and-market-outlook-pricing-energy-shock