Reasons why double-digit inflation forces interest rates to rise
1 year ago
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Rates of 2 percent seem too high only to those who believed that “the new normal” was now almost negative rates. Evidently this is not the case, especially when inflation is in double digits. Do like the Fed
Is the ECB right to raise interest rates? Many think not: while, the American central bank, the Fed, is right to increase them because in the United States inflation is caused by an excess of demand, the ECB should not do it because in Europe inflation is due to the increase. of the prices of imports on which the monetary policy of the ECB has no effect. I think that the differences between the two cases exist, but that they are not as marked as others think and that the ECB cannot fail to raise interest rates. There are several reasons why an interest rate hike is inevitable.
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