ECB Hikes Interest Rates Again
Inflation is of major concern, according to the ECB.
Inflation is of major concern, according to the ECB.
The cold, hard truth embedded in all these numbers is this: going forward, the U.S. Treasury will have to continue to raise interest rates just to keep investors from selling American government debt.
The European Central Bank president Christine Lagarde expects the bank “to raise interest rates further over the next several meetings” across the euro zone.
The Federal Reserve announced its intention to continue to reduce its holdings of U.S. sovereign debt and has no plans to return to buying Treasury securities.
The expected raising of the interest rate by the ECB sent a short-term positive signal to the stock market.
When the ECB raises interest rates, all other things equal it increases demand for euros on the global foreign-exchange market.
Inflation in the UK is currently at 9%, its highest in 40 years, and the Bank of England warned it might reach 11% in autumn.
As interest rates rise, real-estate prices will move in the opposite direction.
Rising inflation is a miserable prospect for a country which, at this point, should be bouncing back from the artificially induced economic coma caused by lockdowns.
Despite higher inflation and upward pressure on treasury yields, the European Central Bank (ECB) maintains that this is not the time to raise interest rates. In an April 14th press release, the ECB reaffirmed its commitment to both unchanged rates and its tapering of the Asset Purchasing Program. The Bank explained that APP-related purchases of […]
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