“Higher for longer” has become the mantra of the powerful central bankers in recent months. Monetary policy is likely to remain restrictive longer than originally expected. Regardless of whether the major central banks will follow up with a final interest rate step in autumn, the interest rate peak has probably been reached and “the worst” is behind us.
In line with the surprisingly strong economic indicators in the US, government bond yields have risen significantly in recent months. This is putting pressure on the prices of many classes of securities and intensifying discussions about how restrictive interest rate policy really is. Could the higher level of yields make the central bank’s job easier in the form of further interest rate hikes?
The terrorist attack on Israel by Hamas last weekend dominates the international headlines. The markets are reacting to this with price declines, but the extent of the movements has so far been limited.
Inflation in the Eurozone is expected to fall further. According to initial estimates, the inflation rate fell more sharply than expected in August. With a view to the next ECB interest rate decision at the end of October, the question now arises: Do interest rate hikes now come to an end?
The stock markets have recently come under pressure due to several factors. Both the higher dollar exchange rate and the higher oil prices and yields on the bond market are weighing on prices. Chief economist Gerhard Winzer assesses the current situation in his blog article.
Oil prices have been rising steeply for several weeks. The prices of the most important oil companies have also risen. How can investors profit?
Despite higher inflation and interest rates, demand for housing in Germany is expected to remain robust.
In the past, sharp hikes in key interest rates often triggered a recession. After the latest economic and labour market data, hopes are growing for a soft landing of the economy.
At the annual meeting of central bankers in Jackson Hole Federal Reserve Chair, Jerome Powell, summed up the uncertain environment as “navigating by the stars in a cloudy sky”. This relates, among other things, to the uncertainty about the level of the neutral interest rate, the lagged effect of key-lending rate hikes on economic growth and inflation, and the drivers of inflation.
With a view to the Ukraine war, the multiple regions of crisis or the extreme inflation, one would be forgiven for thinking that sustainability issues were taking a back seat when it came to investing. Gerold Permoser, Chief Investment Officer of Erste Asset Management, claims that this is not the case and that there is a lot of potential for investors. In a recent press talk, he and Heinz Bednar, CEO, presented five key drivers for ESG investments.
