Markets adjust to "higher for longer"
Markets oscillated as monetary policy interest rate hikes appeared to be coming to an end. Long-term yields surged and then retreated on investors' evolving perceptions of future policy actions.1 After reaching highs in some cases not seen since the run-up to the Great Financial Crisis (GFC), yields declined rapidly in November. Developments in risky asset markets, as well as exchange rates and capital flows in emerging market economies (EMEs), were closely intertwined with the evolution of core bond markets.
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Amid tight monetary policy, changes in foreign currency credit may signal a new phase of global liquidity.
Media briefing on the BIS Quarterly Review, December 2023
Claudio Borio and Hyun Song Shin summarise the December 2023 Quarterly Review and answer journalists' questions about financial market developments and the economic outlook.
The views expressed here do not necessarily reflect the views of the BIS member central banks.