This podcast episode explores the power and limitations of central banks in financial markets. While central banks are often seen as the most influential force in markets, historical evidence shows that they have been unable to prevent major recessions and credit losses over the past few decades. The economy operates like a large vessel that is difficult to turn quickly, requiring proactive decision-making and adjustments well in advance of clear danger signs. The potential risks associated with late-reacting central banks emphasize the importance of closely monitoring economic data to mitigate vulnerabilities in credit.
