Financial assets, which were buoyed by liquidity into stretched valuations, are being re-priced. The ubiquitous acronym QE or quantitative easing is giving way to another – QT or quantitative tightening – in the lexicon of monetary policy.
As central banks, the world’s biggest buyers of bonds, prepare to turn into sellers, their trajectory has been likened to landing on a short runway amidst fierce cross winds. Now, as the drumbeats of conflict rise to a crescendo and economic warfare is unleashed, volatility is hitting high notes.