Central Banks Quietly Default to Doing Nothing at All

Central banks in a supply shock face inflation rising and growth slowing together, so the dual mandate points two ways and policy stalls. Vincent Deluard, Director of Global Macro Strategy at StoneX, explains why the default response to a stagflationary shock is to do nothing. A stagflationary shock breaks the usual trade off between inflation and unemployment, so hiking rates while gasoline prices climb and the economy slows carries a political cost, while the fiasco of easing through the biggest inflation wave in 50 years makes a dovish turn just as hard to justify. The European Central Bank has talked about rate hikes without delivering them and the Federal Reserve has shown hawkish dissent. What forces a decision is duration, as energy costs feed into food prices and shortages. Watch the original interview: https://www.youtube.com/watch?v=byaRJ8D2uJY Discover Actionable Global Macro Insights with StoneX Market Intelligence: https://shop.stonex.com/products/global-macro-insights?utm_source=youtube&utm_medium=social&utm_campaign=sxtv_guest_vincent_deluard&utm_content=share 0:00 Dual Mandate Stops Working 0:55 Wait and Hope Freezes Policy 1:50 Every Move Is the Wrong Move 2:40 ECB Talks Hikes Without Hiking Like and subscribe for more financial market insights. #CentralBanks #Stagflation #StoneX #VincentDeluard