Good morning and welcome to the Weekender for Saturday, September 24, 2022.
Financial markets around the world fell in a coordinated response to cyclical and structural issues. The US Federal Reserve delivered on its promise to continue leaning into inflation-fighting monetary tightening. Markets seemed spooked by the move, although it had been telegraphed for a couple of months. For financial markets globally, it was a week fraught with the fulfillment of prophesies. Inflation is deeply seated and persistent, although softening. Most central banks have chosen to fight inflation with higher interest rates. Not the best tool for combatting supply shocks, but when all they have is a hammer, everything looks like a nail.