The era of cheap borrowing is over. Households, businesses and governments are all starting to feel the pinch, and things are going to get harder before they get easier.
Having learned the lessons of the global financial crisis, central banks across the world slashed interest rates and flooded financial markets with money as an immediate response to the Covid-19 pandemic in early 2020. Governments spent money like it was going out of fashion in an unprecedented and synchronized global effort to ward off the worst economic effects of the pandemic. On their own terms, these efforts were superbly successful. The Covid recession was mercifully brief and shallow as a result.Continue reading