When central banks embark on an aggressive rate-hiking cycle, despite the economy heading for a recession, it shows the extent of the situation facing the world.
On July 21, the European Central Bank (ECB) hiked its main deposit rate for the first time in more than a decade, with a 50-basis-point (bp) move to lift the eurozone and its banks out of a long and painful period of negative rates. The ECB followed up with another rate hike in September — this time with a punchy 75bp hike to take the rate to 0.75%. Further rate hikes are expected.
