The Czech National Bank raised rates by a full percentage point to 3.75% yesterday, outstripping the general consensus that a 75 bps increase would be enough. For some reason, the television pundits last night looked amazed by the move, but the CNB adopted its Shock & Awe strategy back in September, with an impressive willingness to disregard market expectations. For context, the Czech 2-week repo rate was a piddling 0.25% as recently as May, when home mortgages were sliding beneath 2%. Inflation was already making some people nervous at that point, but most economists still argued that . . .
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