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2022/05/31 / Erste Group Research

Eurozone and USA: The search for equilibrium

One has to go back a very long time to see a similarly rapid change in interest rates as during the last few months. Russia's invasion of Ukraine has led to a surge in commodity and energy prices, further fueling a trend of rising inflation rates. The ECB and the U.S. Fed responded by accelerating monetary tightening. For both central banks, however, this was just the beginning. The question for the second half of the year will be how quickly interest rates are raised.

The central banks' task will not become any easier. This is because, in general, inflation rates should recede somewhat, but remain high. The economy, on the other hand, should not survive the high real income losses and the sharp rise in interest rates unscathed, either in the euro zone or in the USA. How strong these effects will be will be decisive for the central banks and thus for the financial markets globally.

In the special section How long will prices rise? we analyze the many causes of the current surge in inflation and provide an outlook for further developments.

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General information

AuthorErste Group Research
Product nameInterest Rate Outlook Eurozone, USA
Topic in focusMacro/ Fixed income
Economy in focusEurozone, United States
Currency in focusEuro, US Dollar
Sector in focus-


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