Economy

Seth Wenig/AP  

The Fed vs. Inflation  

Chief economists: Fed ready to raise – lower in 2024  

The Federal Reserve is probably done with its rate hikes, according to leading chief economists at a number of North America's major banks. That shows a new forecast from the American Bankers Association's advisory committee, writes Bloomberg.  

The economists also predict that the policy rate will be lowered by approximately 1 percentage point in 2024. 

- The consensus within the committee is that the odds for a soft landing have improved quite dramatically in the short term, says Simona Mocuta, chief economist at State Street Global Advisors.  

The Federal Reserve gives its interest rate announcement next week.  

Michael Probst / AP  

ECB vs inflation  

Uncertain before the ECB announcement: The odds are almost 50–50 

Investors remain divided ahead of the ECB's interest rate announcement on Thursday. The markets are now pricing in a 45 percent probability that the interest rate will be raised by 25 points and a 55 percent chance that it will be left unchanged, writes Reuters. 

Bloomberg notes that the odds have shifted in the past month after macro data from Germany came in weaker than expected.  

The signals from the ECB's members have been mixed ahead of the interest rate decision.  

The Netherlands' hawkish central bank chief Klaas Knot warned last week that investors are underestimating the possibility of an increase, writes Direkt. Portugal's central bank governor Mario Centeno instead emphasized the risk of the ECB tightening too much. 

ECB. Michael Probst / AP 

 

EU forecast: Interest rate peak close for ECB  

 

The European Central Bank has soon finished raising its interest rates. This is what the EU Economic Commissioner Paolo Gentiloni says at a press conference, in connection with the EU Commission presenting its summer forecast.  

 

He pointed out that the ECB makes a decision on the interest rate, but that the outlook indicates that the interest rate peak is close.  

 

- We are close to the top for the interest rate, he said.  

 

The central bank issues an interest rate announcement on Thursday, where opinions differ on whether there will be another increase or not.