Part 3/13:
Over the past year and a half, interest rates have climbed from near zero to approximately 5%. Deutsche Bank warns that the full repercussions of these elevated rates are yet to be felt. Historically, rapid increases in interest rates tend to precede economic downturns, often culminating in a “hard landing”—a recession marked by significant economic pain.
The recent rate hikes, driven by aggressive monetary tightening aimed at combating inflation, have been necessary but potentially destabilizing. Deutsche Bank notes that avoiding a hard landing would be unprecedented in economic history, highlighting the severity of the current monetary policy approach.