ExplainSpeaking | Yield inversion, soft-landing and reverse currency wars: A glossary for the troubled global economy
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Dear Readers,
Here’s a quick summary of what’s been happening in the global economy: Notwithstanding rapid increases in interest rates by the US central bank, the inflation rate for June came in at 9.1 per cent. This is the highest in 40 years in the US. Many observers have pointed to an inversion of the US yield curve to argue that the US central bank will not be able to achieve a soft-landing for the economy. And yet, the US dollar continues to gain against all other currencies. Now, in what is being seen as a reverse currency war, most central banks across the world are trying to raise their interest rates to counter the Fed’s actions and ensure their respective currency claws back value against the dollar.
There are three key terms that one is likely to hear repeatedly in the coming days and…
