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What role do central banks play in global markets?

Curious about global markets

What role do central banks play in global markets?

Central banks play a crucial role in global markets. They are responsible for setting monetary policy and controlling the money supply in their respective countries, which can have a significant impact on global markets. The decisions made by central banks regarding interest rates, money supply, and other policies can affect currency exchange rates, inflation, and economic growth, which in turn can impact the performance of global stock, bond, and currency markets. For example, if a central bank raises interest rates to combat inflation, it could lead to a stronger currency and potentially lower stock prices, while a cut in interest rates could boost economic growth and increase stock prices.

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