Financial Conditions Are About To Get Much Tighter

Global financial conditions are tightening as central banks raise rates to fight energy-driven inflation, a trend that futures markets suggest will intensify.

Key Takeaways

• 1.Global financial conditions are tightening, driven by rising policy rates and commodity prices.
• 2.The Global Financial Tightness Indicator (GFTI) is signaling a downturn in cyclical growth, specifically the manufacturing ISM.
• 3.Advanced futures indicators suggest financial conditions will see a more dramatic tightening over the next six months.

Table of Contents

• Financial Conditions Are Beginning to Tighten
• Financial Conditions Set to Keep Tightening
• Global Real Yield Curve Steepening

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