Fed vs Inflation / ECB vs inflation

Fed vs inflationen

Powell Jacquelyn Martin/AP 

 

The Fed vs Inflation 

Fed: The full effect of the tightening has not yet been felt 

  

At his press conference after Wednesday's interest rate announcement, Fed chief Jerome Powell said, among other things, that inflationary pressure is still high and that further increases can therefore be justified, albeit at a slower pace than before. 

 

- We have covered a lot of ground and the full effects of the tightening have not yet been felt, he said of the decision to leave the interest rate unchanged after ten straight increases.  

 

Powell also said that the upcoming interest rate meeting in July has been discussed but that they have not made a decision on  

 

Caisa Rasmussen / TT  

 

The ECB raises by 25 points – the highest level in 22 years  

As expected, the ECB raises the interest rate by 25 basis points. The so-called deposit rate thus lands at 3.5 percent and the policy rate at 4 percent. It is the highest policy rate since the financial crisis in 2008 and the highest deposit rate since 2001.  

 

"The Council's future decisions will ensure that key ECB interest rates are taken to sufficiently restrictive levels to achieve a rapid return of inflation to the medium-term objective of 2 percent and will be held at these levels for as long as necessary," it said in the press release. 

 

The central bank also raises the inflation forecast for the core KPI to 5.3 percent in 2023 from the previous 4.6 percent. At the same time, the GDP forecast is lowered to a growth of 0.9 percent from the previous 1.0 percent.  

 

how to act then. 

Governor of the Riksbank Erik Thedéen. Jonas Ekströmer/TT  

 

ECB vs inflation 

 

The ECB and the Fed increase the pressure on the Riksbank: "A fox shears"  

 

The ECB's and the Fed's hawkish interest rate announcement pressures the Riksbank to follow suit - otherwise the krona risks further weakening. The only problem is that more interest rate increases would increase concerns about a real estate and banking crisis, which is also negative for the krona. That's what assessors say to DN.  

 

- You could say the Riksbank is in a bind, says Danske Bank's senior strategist Maria Landeborn.  

 

Danske Bank expects both the ECB and the Riksbank to raise the key interest rate two more times this year.

 

Shutterstock  

 

ECB vs inflation  

The stock market falls after the ECB's interest rate announcement  

 

The Stockholm stock exchange falls after the ECB, as expected, raised the interest rate by an expected 25 basis points. At 14.36 it looks like this: 

• OMXSPI: -0.9%  

• OMXS30: -0.8%  

 

The ECB raises all three interest rates by 25 basis points and signaled at the time that more could come until inflation is under control.  

 

Sales for H&M in May were somewhat lower than analysts had expected, but the start of June has been good, according to the company. At the same time, Bernstein has initiated surveillance and predicts that the stock will underperform. The clothing giant is up 3.2 percent at the top of the OMXS30.  

 

Things are swinging in the forest sector. First Stora Enso announced that it is planning a restructuring program and a little later Billerud delivered a profit warning. Billerud falls 5 percent and Stora over 4 percent.  

 

In the recommendation pile is Swedbank, which received a buy recommendation from Berenberg. The bank raises 2 percent.  

 

The New York stock exchanges yesterday  

 

S&P 500: +0.1%  

Nasdaq: +0.4%  

Dow Jones: +0.7%