The end of cheap money in Europe. What will the week bring?

Last week's publication of the US CPI report indicated a further decline in price growth in the United States. Nevertheless, the Fed maintained its hawkish stance, raising interest rates by 50 bp.

Inflation projections have been clearly raised - and what is important - Federal Reserve expects that inflation will not return to the target over the forecast period. This means that interest rates in the US may rise even higher than expected by investors.

More rate hikes possible

Currently, the median rate for 2023 is 5,1%, it is worth noting that this is an assessment at the end of this year. In the coming months, however, there may be a situation in which the Fed raises rates above the median to start easing at the end of next year. The Reserve was also followed by the European Central Bank, which last week – as expected – raised interest rates by 50 bp. which means that they were at the highest level since the beginning of 2009.

Christine Lagarde also pointed to the possibility of as much as three consecutive increases by 50 bp., although the market so far does not believe it, estimating the peak level of interest rates at 3,25%. The President of the ECB also announced the launch of a quantitative tightening (QT) programme. The reduction of the balance sheet is to start in March, and its pace until the end of the second quarter of next year is estimated at around EUR 15 billion per month.

We invite you to meet the economist XTB Michał Stajniak, in which he will focus on the key topic of this week - the end of the era of cheap money in Europe.

In today's video:

• But do feet matter?
• ECB even more hawkish!
• What's next with prices gas?

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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

Michał Stajniak

Michał Stajniak - Raw Material Market Analyst in XTB. It places particular emphasis on the linkages between the behavior of commodity prices and the currencies of economies heavily dependent on exports of commodities such as oil, iron ore, gold and powdered milk. He is the author of frequent comments comparing commodity price indices with currency pairs such as AUDUSD, NZDUSD, USDCAD, USDNOK, or EURNOK. He represents XTB in the media (including TVN24 BIS, Polsat News, TVP Info, Bankier TV or Onet TV) and is the author of articles in the financial press such as Parkiet, Puls Biznesu and Dziennik Gazeta Prawna. He is a practitioner of the stock market and the derivative market. In his approach, he values ​​fundamental analysis above all, but often uses Fibonacci levels to determine the demand and supply zones needed in a Price Action strategy. A graduate of Quantitative Methods in Economics and Information Systems at the Warsaw School of Economics.

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