QNB: Global financial conditions are set to remain tight in medium term

QNB: Global financial conditions are set to remain tight in medium term

Qatar National Bank (QNB) expected global financial conditions to remain tight in the medium term and a below-trend economic growth.In its weekly commentary, QNB said, "Since the beginning of the COVID-pandemic, the global economy experienced a series of extraordinary shocks that propelled inflation rates to levels that had not been seen in decades. By mid-2022, inflation reached 9.1 percent in the U.S., and a double-digit record of 10.7 percent in the Euro-Area. These levels were far from the 2 percent targets of monetary policy. Initially, central banks were hesitant to respond to spiralling prices, given the exceptional circumstances set by a worldwide pandemic, and the risk of a deeper economic collapse. However, it became apparent that high inflation was not a short-lived phenomenon, and policy makers reacted strongly to bring inflation rates down to their targets."In the U.S., the Federal Reserve Board (FRB or "Fed") increased its policy rates by 525 bps to 5.5 percent. The European Central Bank (ECB) embarked on a record tightening cycle, increasing its main refinancing rate by 450 basis points to 4.5 percent. Additionally, the central banks began to revert the large purchases of assets that had been implemented during the Covid-pandemic to inject liquidity