Finans

There is no easy escape from the global debt trap

One of the big mysteries in the global economy is why, though inflation is making a strong comeback, long-term interest rates have barely budged in recent months.

As central banks dropped interest rates to their recent lows, easy money flowing into stocks, bonds and other assets helped boost the scale of global markets from the same size as global GDP to four times larger. Now the bond market may be sensing that the debt-soaked and asset-inflated global economy is so sensitive to rate increases that any significant rise is just not sustainable. This file photo shows the headquarters of the European Central Bank (ECB) in Frankfurt am Main, Germany.
As central banks dropped interest rates to their recent lows, easy money flowing into stocks, bonds and other assets helped boost the scale of global markets from the same size as global GDP to four times larger. Now the bond market may be sensing that the debt-soaked and asset-inflated global economy is so sensitive to rate increases that any significant rise is just not sustainable. This file photo shows the headquarters of the European Central Bank (ECB) in Frankfurt am Main, Germany.Foto: Daniel Roland/AFP/NTB
  • Ruchir Sharma
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Publisert 22. November 2021, kl. 16.46Oppdatert 22. November 2021, kl. 16.46