• Fed acknowledges need for restrictive policy and higher u-rate • China lift takes hold as US economy is slowing • ECB acts to contain spread widening; BoJ holds YCC unchanged • Next week: Powell testimony; flash PMIs; lots of hikes They will know I am the lord when I lay my vengeance on them Throughout a turbulent 1H22 that pushed global growth to below its potential pace, we have argued that the global expansion would maintain its footing.

This view has been premised on strong fundamentals that have allowed corporates and households to cushion a series of shocks, and sustained global GDP growth outside China at a trend pace. However, resilience alone is not enough to deliver a return to above-potential growth in the coming quarters. In addition, the drags from COVID and commodity-driven inflation need to fade and monetary authorities need to remain tolerant of the expansion’s inflation sins as they adjust their policy stances.