Growing inflation risks add pressure on Central Banks

Vrasidas Neofytou
Head of Investment Research

See all articles

Inflation has been at the center stage in modern macroeconomic history since it measures the progressive increase in prices of goods and services in an economy.

Global inflation has accelerated in recent months following the reopening of economic activities after the pandemic, the improvement in labor market, the successful vaccination campaigns, the supply chain disruptions, and the higher crude oil and electricity prices.

In the United States, the Consumer Price Index jumped to 7,2% in December, its highest since 1982, in the United Kingdom inflation hit a 30-year high of 5,4%, while in Eurozone it surged to a new record high of 5,1%.

Growing inflation risks have added pressure on policymakers, with the Bank of England already raising interest rates twice to 0,50%, while European Central Bank has turned hawkish, with expectations for a rate hike at the end of the year.

Friday’s unexpectedly strong nonfarm payrolls report for January has increased the chances that the Federal Reserve could start raising interest rates by March to contain rampant inflation.

Investors are ready for more volatility in the forex market at a time central banks around the world have pledged to tighten their monetary policies by raising rates and concluding their bond-buying programs.

Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Exclusive Capital communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.

Read our detailed Marketing Communication Disclaimer

SHARE

CONNECT WITH OUR TEAM

Explore the ways in which we can help you achieve your investment goals.

OUR PARTNERS
bdo

EXTERNAL AUDITOR

ey

LEGAL ADVISOR

lgt

CUSTODIAN BANK

efg

APPROVED PARTNER

Raiffeisen

DEPOSITORY BANK

Prime Fund

GROUP MEMBER