A senior Reserve Bank of Australia official warns that interest rates could become more volatile in the coming years due to potential economic shocks from war, cyberattacks, global trade disputes, and climate change.
Interest rates could become more volatile over coming years due to potential economic shocks from war, cyberattacks, global trade disputes and climate change , a senior Reserve Bank of Australia official says.from the pandemic and armed conflict in Ukraine and the Middle East that have pushed up the global oil price.
Under one potential scenario in the decade ahead, a “fast-burn kinetic” conflict involving major economies could make global shipping prohibitively costly or uninsurable along certain routes, he said.“Global financial conditions could tighten abruptly, with key funding markets, risk asset prices and cross-border lending severely affected.“Payment systems and financial market infrastructures could be affected by sanctions and counter-sanctions.
A senior Australian investment manager said that ultimately Australia would be forced to choose between the two technology systems, and would ultimately side with the US.Meanwhile, Dr Jones said less certainty over inflation outcomes and central bank interest rates was also likely to force investors to demand a higher interest rate premium for holding bonds for longer periods.
The downfall of Silicon Valley Bank and Switzerland’s Credit Suisse earlier this year were exacerbated by an unprecedented withdrawal of deposits.
Interest Rates Volatility Economic Shocks War Cyberattacks Global Trade Disputes Climate Change
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