Global financial conditions, perceived as strongly correlated with future growth, are at the tightest in two years, driven by soaring energy prices, sliding stocks and the market fallout from the Ukraine-Russia conflict.
Goldman Sachs, which compiles the most widely used financial conditions indexes, has in the past shown a 100-basis-point tightening crimps growth by one percentage point in the coming year, with an equivalent loosening giving a corresponding boost. “Economic dynamics will slow down further, inflation will be high nonetheless and you will see second round effects and then you get a stagflation scenario,” he added, referring to a combination of rising inflation and slower economic growth.
Viraj Patel, global macro strategist at Vanda Research, said financial conditions would take on even more importance for the ECB, which meets on Thursday.
Der. That's why they held off closing the skies. Here we go. We are all in the war. Gee, thanks so much, Mad King Crazy Pants. You're a real piece of work. You old fkg git.
It is NOT the 'Ukraine-Russia conflict'. It is the 'Russian invasion of Ukraine'. Words matter. Facts matter.