Fighting Inflation, A Perfect Storm for a Liquidity Crisis?

Efforts to curb inflation by central banks, particularly the Federal Reserve (Fed), may well trigger a liquidity crisis in the markets. New study outlines the very real possibility of central banks creating a liquidity crisis by the end of the year

That’s the assessment of University of Bath researchers, which claims that excessive anti-inflationary policies could create a money shortage within this calendar year. Moreover, it shows that central banks can be a destabilizing factor as well as a stabilizing force in the economy with both inflationary and deflationary policies.