Institutions: Global central bank policy tightening may be quite limited

On May 17, TsLombard said a radical tightening cycle was unlikely. In the face of oil price shocks, the extent to which central banks around the world may tighten policies may be quite limited. In Europe, energy shocks are already dragging down economic activity. The UK's labor market has appeared unstable for some time, and hiring sentiment in Europe has become increasingly weak. In our view, the European Central Bank and the Bank of England will tighten less than market expectations this year, and this possibility is currently underestimated. In the United States, the Federal Reserve is less likely to implement policy tightening in the short term, and even if it does, it will almost certainly wait until 2027. (Jin Shi)