The highest inflation in the XNUMXst century. What will the week bring?

The past week in the markets can be compared to a crazy roller coaster ride. On the one hand, there were concerns about the crisis, but on the other hand, we could observe flashes of euphoria on Wall Street and oil price declines indicating a recessionary direction. Inflation in Poland turned out to be the highest in the XNUMXst century, and investors are asking themselves - has the Fed resumed reprinting?

Quantitative Easing is an innovative monetary policy tool by means of which the central bank buys securities from the market to stimulate the economy. The QE program began to be widely used after the crisis of 2007-2008 - primarily by Federal Reservebut also other major central banks. The increase in inflation in the United States and the related need to change the direction of monetary policy led the Fed to abandon QE and start the reverse process. But collapse of the Silicon Valley Bank and the ensuing perturbations in the banking sector forced the Fed to provide additional liquidity to the markets.

Does this mean QE is back?

NO. The USD 300 billion loan program for needy banks is not a return to quantitative easing, although it has an impact on the markets. The situation is all the more critical for the Fed not only due to the recent bank failures, but also due to the decision on the shape of monetary policy in the United States scheduled for Wednesday. Until recently, markets expected the Fed to raise rates by as much as 50 bps. Currently, there is even talk of a possibility of a 25 bp cut. We will find out what the Reserve will do on Wednesday at pm. 19:00.

Meanwhile, the data on inflation published by the Central Statistical Office for February may only seem to be encouraging - inflation in Poland amounted to 18,4% against forecasts of 18,6%. However, data excluding the impact of energy prices showed a record 13,1% increase in prices in February.

Unless there is a global recession (…) I don't really see how we would get back to the inflation target - says XTB Chief Economist, Dr. Przemysław Kwiecień.

We invite you to a meeting with the Chief Economist XTB Dr. Przemysław Kwiecień, in which he will focus on the key topic of this week - the highest inflation in the XNUMXst century.

In today's video:

• What are central bank interest rates?
• The ECB has not succumbed to the pressure, but what next?
• What next with PLN?

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In addition, due to the very dynamic situation in the world, additional ones will be made available raports Video on the impact of war, pandemic and economic crisis on the global economy.

About the host

Dr Przemysław Kwiecień - Chief economist X-Trade Brokers. Doctor of Economics at the University of Warsaw, graduate of the University of Warsaw and London Metropolitan University (MSc). Holder of the prestigious CFA certificate. He has been working for XTB since 2007, previously he gained experience as an advisor to the Minister of Finance, Mirosław Gronicki, and an economist at Bank Millennium. At XTB, he manages the Analysis Department.

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