The major central banks have walked a fine line of pushing rates higher to bring down inflation while avoiding a recession, which eventually will lead the way to a soft landing for the global economy. Yet, there are plenty of risks that remain and inflation could stay higher for longer.
The ECB and FED have underscored the fact that they are not in no rush to drop rates. In fact, they concerned that loosening policy too soon could reignite inflation to surge again.
Investors should therefore take a cautious approach on the most recent stock market advances as there are a number of external issues not solved and there is a constant increase in the malaise about a deflationary scenario to a widening conflict in the Middle East as well as in Ukraine, aka Moldova getting involved via the Kremlin-backed Transnistria region