Rarely, the opinions of a turnaround in interest rates in Europe as far apart as at present. Some experts even expect at tomorrow's Zentralbankratsitzung with a first interest rate move, others maintain that this will happen no earlier than at the turn. My tip: the first interest rate hike is expected sooner than most.
As if on command (probably it was one), the wording of the ECB's leading bankers in recent weeks has changed from Trichet to his possible successor Draghi: Suddenly they no longer speak transient inflationary pressures and interest rates reasonable, but caution against second-round effects of rising energy and food prices and against substantial pay rises. As a rule, the monetary authorities to prepare before with such a verbal swing changes in interest rates. The currency markets have certainly taken the weather and in anticipation of a much earlier rate hike in Europe than in the U.S. ever driven the euro up properly.
speaks In fact some for an early turnaround in interest rates: The rate of inflation in the euro zone in January was 2.3 percent above the target of two percent, and in view since then further increases in energy and commodity prices in February probably give a further Tick down. And the economy is developing significantly better than predicted, particularly in the economically developed countries around Germany. There, take the preemptive inflation indicators such as producer and import prices are not so clear on how long since. But what is even more crucial: inflation expectations in the markets and citizens have screwed up almost on a weekly basis. Trichet and his colleagues know exactly but it is difficult monster to dampen price rises, if they have fixed only once inflation expectations in the minds of consumers and businesses. A warning shot at the right time could prevent harm here.
There are of course also good reasons for a speedy turnaround in interest rates - otherwise, the predictions were so far apart not so. On the one fight in vulnerable with Greece and Ireland in the lead with considerable economic problems, so that a premature rate hike aggravate the situation may still. Second, the monetary expansion moves in a frame that is not supposed to affect inflation rate. The broadest monetary aggregate M3, which includes everything from cash to short-term bond grows extremely slowly at an annual rate of just 1.5 percent. And on the money supply, the ECB pays normally very much.
The pros and cons to talk a whole but for an early interest rate hike away from the crisis level of one percent. The ECB has traditionally been rather cautious in its interest rate policy, and that is it now that it has defaulted on their bond purchases of deficit countries and the abandonment of the guarantors of stability Axel Weber on the ECB presidency into disrepute, to be more. Otherwise she has a credibility problem. Although I do not believe that tomorrow the interest rate screw will turn up, but in one of three spring meetings in April it would begin from June. First, it must wait and see how developed the Libya crisis. And they must reinforce previously in the official statements after the meetings the tone and the mood so the markets at higher interest rates. And also it is tomorrow probably restrict the first clear signal that bailouts for banks and thus show that they are willing to move quickly to normal.
of the stock exchanges must not necessarily be a burden. For many investors, inflation, the biggest threat to economic and stock boom dar. Here, if the ECB to control time and in moderation, it can even become a support for the stock market. And for the euro.
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