Interest rates v Inflation

[Alinakazmi]

The pandemic has changed the way we work and shop. Will the dynamics of demand and supply revert to normal? Should ECB increase interest rates? Will inflation gravitate back towards the Fed’s long-term goal of 2%, or will 2023 potentially bring a recession? What are your thoughts?

[Haamsaaveni (Hamsi) Kumar]

The Feds have been buying bonds since the pandemic to push down borrowing costs and stimulate the economy but as prices rise and worsening of Covid in the US alongside supply chain issues, they need to act more quickly than their March deadline.

However, the ECB has stated it wants to raise interest rates in 2024 which is too far along in my opinion with the inflationary pressures the EU is facing such as manufacturing shortages affecting Germany’s GDP.

[Author]

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