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The “Wealth Effect” Feeds into the Thinking of Central Bankers

June 2022 | Newsletter 1

Central banks are trying to curtail aggregate demand in order to deal with the supply induced price shocks of the pandemic.  They can’t manufacture a new factory or a wheat field so the only tool they have to balance an economy is crushing demand.   One way of accelerating that process is to destroy wealth that underpins demand, at least in part.  The so-called wealth effect.

READ THE FULL ARTICLE: https://mailchi.mp/2676ccaa5e1b/harness-financial-services-june-newsletter