Global Financeeditor Andrea Fiano's letter to you, the reader.
VOL. 36 NO. 2
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Central Banks dominated the last few years not just for their monetary policies, but for the political and social consequences of their actions. Quantitative easing in many industrialized economies and zero or negatives interest rates have become part of economic conditions around the world.
The pandemic unfortunately brought many casualties, but also sparked a massive monetary and fiscal stimulus in both advanced and emerging economies. Today, central bank policy is in new and unknown territory, with fresh prospects for risk related to inflation and its long-term consequences. One huge question is what central banks will do with the results of quantitative easing—their balance sheets bloated with all the assets bought to support the economy.
As a result, the new year seems once again dominated by the timing and the magnitude of central bank actions on interest rates. In the vast majority of countries, interest rates are expected to increase—maybe even rapidly—to keep inflation under control. But this possibility raises other questions about the consequences on the real economy and the financial markets, and whether these conditions will affect the relevance and importance of central banks.
In companies large and small around the world, these questions have been the center of attention and forecasting for months. Predicting the correct economic scenario will drive strategies and plans for each and every company. And uncertainty seems to be pretty high, because we are experiencing a quite dramatic change of perspective.
Of course, these are not the only relevant issues for our readership. This month’s cover story focuses on one interesting development on the sustainability front: the new global protocol for carbon trading that came out of last year’s COP26 summit in Glasgow. Our focus is on this often-overlooked last-minute result, which received the support of some tech giants and opens concrete new possibilities for this key market.
Andrea Fiano | Editor
afiano@gfmag.com
