Scares the markets – Negative decor in USA, Britain, Eurozone, China

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By Chrysostomos Tsoufis

The ghost of inflation hovers over the world, sowing terror in the markets. The US was the first to broadcast SOS with the worst sell-off of shares since June 2020. It is estimated that approximately 1.5 trillion. dollars faded overnight. As expected, the stock markets in Asia followed, while all the major European stock indices were painted red.

USA and United Kingdom face higher inflation for the last 40 years, the Eurozone has never seen more intense inflationary pressures while in China the inflation monster …. is waking up at a faster pace than analysts estimated.

As if these were not enough, the head of the IMF, Kristalina Georgieva confirmed the fears of most. That inflation has come to stay.

«We must begin to realize that this is not the last inflation shock. I stopped thinking of inflation as a transitional thing when the OMIKRON mutation erupted last yearThe Bulgarian economist emphasized characteristically.

But those blamed by analysts for underestimating inflation and treating the period of rising prices for goods and services as a mere transitional period are the central banks.

H FED the ΕΚΤ the Bank of England have been found …. in the chair because according to the analyzes they were inactive, they were found behind the wave, leaving inflation to heal. And now, they run and do not arrive trying to control the problem with … sharp interest rate increases. The US Federal Reserve, for example, has already raised its interest rate by 0.75% in the last 3 months, 025% in March and 0.50% on May 4, which is the largest increase in the last 20 years.

The But analysts warn – and with them the markets with their reactions – that the increase in interest rates, let alone a sharp one, will seriously affect growth. Concerns are already being raised in the US about the mortgage market, the source of the ills of the previous financial crisis – and how borrowers will respond to rising interest rates. At the same time, it seems that consumer demand is already affected, with the indicator measuring the consumer climate declining to a three-year low.

Source: skai.gr

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