The ECB leaves the money locks open.
Prices are rising significantly, but the central banks are holding back. However, this assumes that inflation will soon weaken again. What can investors do?
I.Inflation rates are rising in many parts of the world – but the central banks have so far been calm and want to stick to their very loose monetary policy. This presents investors with new challenges. Inflation in America was 5 percent in May. For Germany, the Bundesbank expects an average of 2.6 percent this year, as it announced on Friday, and even 4 percent in individual months. That is a significant increase from their last forecast of 1.8 percent. And the European Central Bank (ECB) has also raised its inflation forecast for the euro zone to 1.9 percent. Nevertheless, ECB President Christine Lagarde is relying on a “steadfast policy”, as she announced: The central bank does not want to intervene – savers and investors must protect themselves.
The financial markets reacted rather indecisively to the messages from “Super Thursday” with an ECB meeting and American inflation figures. The Dax, which had risen slightly with the ECB press conference, went out of trading on Thursday with a tiny minus. On Friday there was an increase of 0.6 percent to 15,665 points by the afternoon. Bank shares fell significantly on Friday. The Deutsche Bank paper lost more than 3 percent at times, the Commerzbank share 4 percent in value. Behind this is apparently the calculation that the prospect of extremely low interest rates tends to make the banks’ business more difficult. US Treasury bond yields rose Thursday in response to the high inflation figures. In the bond market, yields rise when prices fall. The inflation worries are reflected in rising yields because investors believe a tighter monetary policy and thus higher interest rates are possible.