Energy Shocks and Rate Hikes: Central Banks Tighten as Trade Fragments

The global economy is bracing for a fresh wave of monetary tightening as energy-driven inflation forces central banks' hands. The European Central Bank delivered a widely expected 25 basis-point hike on September 10, lifting its deposit rate to 2.50% while signaling a more hawkish stance. Meanwhile, the Bank of Japan is all but certain to raise rates by 25 basis points next week, pushing its benchmark to 1.25% — the highest since 1995. This...