How rising interest rates could be inflationary

This week it’s been all about the market questioning exactly how serious central bankers are about raising interest rates.

This is the juggling act: on the one hand, you have central bankers trying to get the market used to the idea of higher rates, but without causing a panic. On the other, you have actual economic data coming in and revealing that the economy is doing OK, but there’s no real inflationary pressure coming through.

So markets remain sceptical enough not to rush headlong into a full-blown sell-off. And meanwhile, stocks are hitting new highs again. The ‘buy-the-dip’ mentality is alive and well [...]