Joyce said the real concern is that the global economy must deal with an additional demand bump, noting that businesses and households have lost hope in navigating the pandemic and the government’s larger financial and monetary response, and supply chain issues. has performed better than What has happened and can happen again.
“The magnitude of this disruption is like nothing we have seen before. It is well above any trend that we have seen in decades,” he said, noting that people are shopping online to occupy themselves And central banks are using new tools or expanded mandates to address the quality of employment and how it is distributed equitably across income groups.” These are things that central banks haven’t had to do before. “
He added that, as well as inflation well above the target, “there’s a little bit of unknown territory, and it worries me more”, although there were early signs in late 2021 that “the Fed is going to correct it and the markets believe.” That’s the Fed.”
Joyce was somewhat optimistic, however, adding that central banks are dependent on data and markets are getting better at understanding it, even as capital markets are impatient. He was concerned that if banks issue poor data points or inflation lasts a little longer, “the market could run out of patience quicker than central bankers. Although I think patience is the right course of action.”
“This is not to say that this is a disaster scenario for the markets. It simply means that we are likely to see a good old-fashioned correction that we haven’t seen in a long, long time.”