Since inflation came in hotter than expected in September and the economy expanded in the third quarter, the Federal Reserve seems to be on track to approve another 75-bps rate hike this week.
The current inflationary environment is being fed by geopolitics-led supply-side issues, specifically for energy. However, interest rate hikes are primarily meant to rein in demand-driven inflation. Hence, there are concerns that such indiscriminate hawkishness by the central banks could stifle growth, restrict supply, perpetuate further inflation, and push economies into the abyss of recession.
