Economy

The Fed vs Inflation 

"Forget six drops - Cold War 2 has started"  

 

There is no chance the Fed will cut interest rates six times this year as the market has priced in – unless the US enters a deep recession. This is what Harvard professor Kenneth Rogoff tells Bloomberg in connection with the summit in Davos.  

 

- It is a wishful dream in case we get a soft landing. It won't happen – we'll get two or three reductions, says the heavy-hitting economist.  

 

At the same time, he believes that the probability of a deep recession is around 25 percent - and then there is almost no limit to how much the Fed can be forced to lower interest rates in a panic.  

 

The 70-year-old adds that today's geopolitical tensions are unlike anything he's seen before in his career. Rogoff describes it as the world being in "Cold War 2", which increases the risk of inflation taking hold.

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Swedish inflation  

Wallenberg: Obvious risk of new inflation shock  

 

The risk of a new inflationary shock as a result of the events at the Red Sea is obvious. This is stated by Jacob Wallenberg, chairman of Investors and Swedish Business Association, in Ekot.  

 

That, for example, a number of car manufacturers now say that they have to stop their production due to delays will lead to price increases, he emphasizes. Investor is constantly investigating possible ways to meet these types of challenges. 

 

- A company looks at all the threats and opportunities that exist around the world all the time. Then you have to adjust your production processes, says Wallenberg to the radio.  

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Swedish savings  

Fund assets are increasing - soon at the record level in 2021  

 

During last year, the Swedes made net deposits of almost SEK 100 billion in funds - and soon the fund wealth will again be at the record levels from 2021. This is reported by DI with reference to the industry organization Fondbolagen.  

 

- Last year, net deposits were mainly made in equity funds, but long-term fixed income funds also attracted savers, says Fredrik Hård, economist at Fondbolagen.  

 

The US funds fared best with an average return of 19 percent. In second and third place came the global funds (15 percent) and the Swedish and European funds (14 percent).