Olivier Gourinchas had a chat with CNBC’s Joumanna Bercetche in the always exciting Washington, D.C. Apparently, central bank hikes are making banks sweat a little, as funding costs rise, and they’re losing some pocket change here and there in assets like long-term bonds.

Gourinchas said, “Banks are feeling the heat now. They’ve got some padding, sure, but it’s making them a tad more cautious, maybe even lending out less money.” Guess someone’s tightening their purse strings!

Now, the IMF imagines a world where banks’ funding conditions become even more claustrophobic and lending shrivels up, leading to global growth in 2023 dropping from 2.8% to 2.5%. Yikes!

And that’s not even the worst part! Gourinchas also mentioned that their super fancy models predicted an even darker timeline, where financial stability goes out the window! Hold onto your hats, folks – it’s gonna be a bumpy ride./n/n Serious news: https://www.cnbc.com/2023/04/11/banks-creating-downside-risks-for-global-growth-imf-chief-economist-.html