With one … ear in Portugal will be the world markets.
By Chrysostomos Tsoufis
Very close to the westernmost tip of the Portuguese Riviera is Sintra, a beautiful small town of about 380,000 inhabitants, full of castles, palaces, gardens and historic villas. Sintra is protected by UNESCO, there are archeological finds that are placed in the 5th millennium BC and it is almost permanently declared one of the best means of living in Portugal.
The heart of the world economy will beat in this small town as from today until Wednesday it hosts its annual forum European Central Bank. A central issue could not be other than the challenges facing monetary policy in a rapidly changing world.
In plain Greek, central bankers in their speeches should answer how quickly and abruptly they need toraise interest rates in an environment high historical inflation without eating so much growth that the nightmares of stagnant inflation of the 1970s or even recession awoke. Especially on Wednesday, when in the same panel will be found Christine Lagarde of the ECB, o Jerome Powell of the FED, o Andrew Bailey of the Bank of England and the Agustin Carstens of the Bank for International Settlements, everyone will watch with bated breath the effort of central bankers to find the golden section between inflation and recession.
The Eurozone is facing historically high inflation and the US and UK have the highest inflation in 40 years. Americans and Britons have already started raising interest rates with the former being much more aggressivewhile Christine Lagarde appears as less daring and will enter the dance of increases from July. And all indications are that inflation will persist as the Russian-Ukrainian war shows no signs of recession, and the deficit between supply and demand as a result of the pandemic is not being bridged.
With one … ear in Portugal will be the world markets. The markets reacting with panic interest rates from the US Federal Reserve for this reason and from the beginning of the year fall by about 20% The markets that sent interest rates to … God – in Greece reached pre-memorandum levels – when Frankfurt meant end of cheap money forcing Christine Lagarde into her own Whatever it takes by creating the tool against debt market fragmentation.
Governments, which every now and then are forced to pay extra support packages to households and businesses for inflation, and especially in Europe, need … support, since there is no common position and, of course, the voters who are also the ones who in the end they are affected by the decisions of the central banks.
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