Reports on both sides of the Atlantic of ending the current cycle of monetary easing as a central policy option were probably a smoke screen to cover up the poor state of the financial system. The analyzes that are circulating refer to the prospect that the Fed and the ECB return from the spring of …
Tag: ECB
The ECB’s high interest rates will “test” the Economies of the Southern Eurozone member countries
Although interest rate hikes appear to be peaking in the EU, the southern member states of the Eurozone should expect a lot of pain in the coming years. More specifically, last year’s ECB interest rate hikes are expected to have a greater impact on southern than northern eurozone countries in 2024. And given that asset …
The battle with inflation and recession is becoming increasingly difficult
The entire financial press’ narrative of a “soft landing” of the economy – US and global – and avoidance of recession is fostered through the “uses” of the FED and ECB, with the former fueling investor expectations for aggressive rate cuts in time that has simply put a “brake” on their rise. What they cannot …
Recession will solve the problem because anti-inflationary policies have reached their limits
Central banks insist they are not done raising interest rates yet, with inflation still well below the 2% target. The result is that the EKT is currently at the highest interest rates in its history and the FED is at the highest interest rates in 22 years. At the same time, various side effects of …
Loans: When is it beneficial to change the interest rate from floating to fixed?
The answer depends mostly on how close it is to expiration. Important factors are the rate of rise in interest rates, the margins on new loans and how much risk a borrower can bear. Since July, the ECB has raised interest rates by three percentage points, putting corresponding upward pressure on the benchmark floating rate, …
The ECB’s aggressive interest rate hike is causing problems for the EU
The ECB’s aggressive interest rate hike is causing problems for everyone in Europe. To citizens who are asked to pay a higher installment on their mortgage or consumer loan, to businesses that are raising the cost of servicing their loans, to states that see their existing bonds collapse, and even to public debt that, instead …
How the ECB Will Force Banks to Raise Deposit Rates
The monetary policy of the EU it seems at the moment to be on the one hand ineffective, on the other hand leading to a dead end causing negative effects on the economy, with no benefits for anyone except the banks who will see their profits increase from the increase in loan rates while they …
What do the Spread Control Mechanism mean for the EU Economy?
The 50 basis point increase in the ECB’s deposit rate, double what the ECB had initially communicated and in line with the hawks’ wish, was combined with the announcement of a new spread control tool, the Transmission Protection Instrument (TPI). The threat of recession is greater in Europe: the war in Ukraine and the energy …
Euro-Dollar Parity 1:1- Europe takes Steps Backwards Compared to the US
Each currency reflects the reality in the economy and is a tool of a specific economic policy. Reflecting at the same time, the general situation of the period, it is a matter of time, as everything shows, for the parity of the euro against the dollar to reach the absolute one-to-one and to fall below …
Emerging Stagnant-inflation in the Eurozone/EU & USA
Inflation begins to make a threatening appearance in the EU and US since last summer due to a combination of dynamic economic recovery in COVID-19 conditions, serious problems in international trade and supply chains and upward trend in international oil and mainly gas prices. Inflation had reached high levels before the Russian invasion of Ukraine. …