Central Banks In Tightening Mode Over High Inflation, Recession Worries

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Global central banks unleashed a large amount of policy tightening this week, led by the Federal Reserve that delivered a bigger-than-expected 75 basis points hike on Wednesday, as policymakers across the world are increasingly worried about the persistence of runaway inflation and the prospect of a recession.

Read more: Federal Reserve Raises Interest Rates By The Most Since 1994

In Europe, the European Central Bank grew concerned over the rising peripheral bond yields and signaled on Wednesday that it is preparing a new tool to address the fragmentation risk in the euro area.

Read more: ECB Plans New Tool To Tackle Fragmentation Risk In Eurozone

On Thursday, the Bank of England raised rates on expected lines, while the Swiss National Bank surprised with an unexpected hike.

Read more: Bank Of England Lifts Key Rate To Highest Since 2009

Read more: Swiss Central Bank Hikes Rate For First Time Since 2007

Meanwhile in Asia, the Bank of Japan refused on Friday to join its peers in raising rates and maintained its ultra loose monetary policy, even vowed more easing if necessary.

Read more: Bank Of Japan Maintains Ultra Loose Policy Stance

Taiwan's central bank on Thursday raised its policy rate for a second time. Hong Kong's de facto central bank followed the Fed and lifted its key rate.

Read more: Taiwan Central Bank Hikes Key Rate For Second Time

Read more: Hong Kong Central Bank Raises Rate By 75 Bps

In South America, Brazil's central bank raised its key interest rate, called the Selic, on Wednesday, and signaled more tightening ahead.

Read more: Brazil Central Bank Raises Rate By 50 Bps; Signals Another Hike In August

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