FRANKFURT—International policy makers shifted into firefighting mode on Monday as investors fretted about possible contagion from bank failures in the U. S.—and bet that central banks could slow or reverse their aggressive interest-rate increases to avert wider instability.
The collapse of two large banks in the U.S. within three days and the wind of panic these events have unleashed in global markets underscore the delicate path that central banks are trying to tread as they raise rates at the fastest pace in decades to stamp out high inflation.
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