Central banks 'have eggs in their faces' and risk causing a recession in their 'panic' to release them
The Bank of Canada’s (BoC) surprise decision to raise interest rates by 1 percentage point has shocked global markets and Canadian borrowers and raised expectations more central banks will follow with super-sized hikes. Key points: The Bank of Canada has raised interest rates by a full percentage point, while monetary authorities in Singapore and the Philippines have also tightened them sharply Former IMF chief economist Maurice Obstfeld worries the central bank is catching up after delaying rate hikes for too long He warned that rising interest rates too quickly around the world could trigger a major economic downturn like that seen in the 1980s The BoC raised its policy rate from 1.5 percent to 2.5 percent, the highest since 2008, in a bid to contain inflation. It is far from alone in raising interest rates quickly. Today, the Philippine central bank raised interest rates by 0.75 percentage points to 3.25 percent in an unscheduled move, while the Singaporean authorities also tighten