Are the markets too bullish on inflation? Yes, according to Goldman Sachs, which estimates that the decline will be slower than expected in the United States. On the European side, the IMF warns the Union against a prolongation of high inflation rates. What is shaping up for the years to come?
Markets may be too bullish on inflation
According to analysts at Goldman Sachs, the markets seem to be banking on a rapid drop in inflation in the United States, which would reduce the pressure in terms of prices. But progress may be slower than expectedparticularly in certain sectors such as health:
“Although we expect inflation to decline further, the markets seem considerably more optimistic than we are regarding the speed of this decline.»
Energy costs could also decline more slowly than expected, but investor appetite does not reflect current indicators. We remind you that the Federal Reserve does not intend to reduce its interest rates soon. Last Wednesday, its director Jerome Powell thus indicated that it would be necessary to wait two to three years to see inflation come down so “really meaningful».
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Europe warned by the International Monetary Fund (IMF)
On the European side, inflation is down… But moderately. Too moderately according to the director of the IMF, who explained on Euronews that it was a high risk for the European Union (EU) :
“The most important thing for Europe is to get inflation under control. For what ? Because inflation is bad for growth and a tax on the poor. In the medium and long term, it is essential for Europe stimulate innovation and create more dynamism.»
ECB forecasts indicate that inflation could fall to 5.4% this year, from 10% over the past year. However, we will have to wait until 2025 to consider the 2% rate targeted by the central bank. Especially since the factors are multiple. A few days ago, the French Competition Authority warned the food sector, accusing companies of “excessive profits» not justified by the rise in raw materials.
We should therefore not see a sharp fall in inflation before 2025, in the United States and in Europe. This should continue to promote alternative financial solutions, including cryptocurrencies.
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Source: Reuters, euro news
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Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
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