One doesn’t have to be a big economist to conclude that as concerns about geopolitical tensions intensify, consumer confidence is being hit harder. A striking example is what is happening in the US, where the trade war declared by Trump has dragged consumer confidence into tatters. Specifically, based on a new measurement by the University …
Tag: ECB
EU will suffer a loss of 260 billion from Trump tariffs – Markets crash from -15% to -20%
If Donald Trump follows through on his promises and imposes tariffs on European goods imported into the US, then the continent will truly be plunged into a deep recession. Donald Trump’s victory could hurt Europe’s economy, as the proposed 10% US tariffs risk hitting European exports such as cars and chemicals, eroding Europe’s GDP by …
Bets against the euro-dollar parity are increasing dangerously
Anticipation of the risk of the euro slipping against the dollar is rising in financial markets after last week’s rate cut and the scenario that a Donald Trump presidency could spark a global trade war. Days after Trump suggested that US tariffs could target Europe as well as China and other countries, European Central Bank …
ECB: Inverted Bond yield curve warns of coming pain and 2008-style recession
The possibility of a major financial crisis, similar to the one that occurred when Lehman Brothers went bankrupt in 2008, is increasing day by day. An important indicator in this regard is the inverted yield curve of US bonds, which is historically associated with recessions. As an example, it is worth noting that from the …
After Inflation, the beginning of Recession or Stagflation?
The inflation phenomenon continues to weaken recently (at 2.5% in June in the Eurozone) although as has been emphasized several times this does not mean that prices are falling. Accuracy remains a “noose” for incomes, a condition that can lead to a parallel weakening of economic activity and investment and ultimately to recession. The odds …
Target 2 is a nightmare for France and other EU member countries
In France, President Emmanuel Macron accuses Lepen and the right or other far-right that if he comes to power – which is a given, based on the opinion polls so far it reaches 35% – that chaos will be caused in the French debt. They said the same about Italy but they say nothing about …
The Big Mistake of Markets for Central Banks
Six months ago, the world’s major central banks were preparing for a move that would reward anyone with a credit card or hoping to buy a home or run a business: A global shift to lower interest rates that would make borrowing cheaper and loans more available. Interest rate cuts are “a topic of discussion …
The nightmare of ECB policy and the mistake of cutting interest rates
The ECB decided to cut interest rates by 25 basis points on the same day it raised its own inflation estimates for 2024 and 2025. If anyone wants irrefutable proof of the lack of independence of central banks, this is it. The ECB has only one mandate, price stability, and it has violated it for …
The vicious economic cycle continues
The fact that the Federal Reserve left interest rates unchanged, in the range of 5.25% – 5.5%, was of no concern to US stocks. On the other hand, he continues, the promise not to reduce them and to continue monetary tightening exerted downward pressure on bond yields, with the yield of the 2nd falling by …
Hard austerity is coming with over-indebtedness and high inflation
The era of low interest rates and “easy money” is over, despite the dominant narrative in the international financial press of a new round of monetary policy easing that will return economies to pre-pandemic health crisis status and the prophecies of monetary policy makers policy that set the benchmark for monetary policy easing next June …