While equities have recently risen, yields on the bond market have weakened. The markets are being supported by increasing hopes of a “soft” landing for the economy. What are the chances of this scenario?
Inflation rose sharply in 2021 due to several supply shocks. Although there is a clear downward trend. However, the supply shocks could also have a structural effect on inflation. A look at the Phillips curve model can shed light on this.
The European Central Bank has raised the key interest rates probably for the last time in this interest rate cycle. But the rising oil price poses a risk that the ECB has only taken a pause.
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.
Both the European Central Bank and the Federal Reserve in the USA raised the key interest rate by 25 basis points last week. However, both central banks signalled that the end of the cycle is near – or may even have already been reached after the recent rate hikes.
The stock markets are also usually a little quieter during the summer months. Many market participants take a break due to holidays and the general activity decreases. In any case, a look at some important charts indicates that no nasty surprises are to be expected during the holidays.
The stock markets look back on a strong first half of the year. In addition to the already familiar factors of inflation and key interest rates, the trend topic of artificial intelligence (AI) came into focus. In this interview, fund manager Tamás Menyhárt looks back on the past six months and tells us what has to happen for 2023 to end as happily as the first half of the year did.
The feared recession has so far failed to materialise and inflation is also falling. Nevertheless, the risks remain on the downside. What could be in store for the markets in the second half of the year?
Central banks remain on a restrictive course and hold out the prospect of further key interest rate hikes. Although there are some signs of a further decline in inflation, it is falling more slowly than expected. You can read where the journey could lead in the blog post.
This week, the markets are eagerly awaiting the upcoming interest rate decisions. The Fed in the USA will make the first move today, Wednesday. For the first time in the current cycle, no increase in the key interest rate is expected. For tomorrow’s interest rate decision by the ECB, on the other hand, the market expects a further rate hike of 25 basis points.