Below is our "Chart of the Day" and a brief excerpt from today's Early Look written by Financials analyst Josh Steiner.
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Fiscal dominance refers to a situation where a government's fiscal policy dictates the direction of monetary policy. In a scenario of fiscal dominance, the central bank might be forced to finance government spending by purchasing government bonds, which can lead to higher inflation. Fiscal dominance can lead to economic instability if not managed properly, as it often results in high inflation, loss of confidence in the currency, and difficulties in managing economic cycles. Bottom line: Strap in. Interesting Times are ahead. |
