Interest rates will go up. What will the week bring?

Last week's PCE inflation reading surprised negatively. After CPI inflation dropped to 6,4% two weeks earlier, the increase in PCE index (especially the core index) froze the markets and triggered discussions about a possible 50 bp rate hike. at the next meeting Fed. In addition, used car prices in the US have started to rise again, indicating that the "easy" fall in inflation in the US is behind us. Also preliminary business activity indicators for February showed a somewhat complicated picture of the economic reality.

The strong consumer is the problem

Noteworthy is the significant rebound in indicators for the services sector - both in the euro area and in the UK. This may suggest that the consumer is stronger than it might seem so far, although the impact of the recent ECB interest rate hikes has probably not yet fully revealed itself. EURUSD therefore, it continues its correction towards 1,05, and the strong dollar negatively affects the valuation of gold, which is approaching support in the region of USD 1800 per ounce. The retraction can also be seen on stock exchange indices such as the Polish WIG20. The situation on the Warsaw Stock Exchange is to some extent influenced by China, which, despite the opening of the economy in January, did not record a significant increase in demand, judging by the prices of some industrial raw materials.

We invite you to a meeting with the Chief Economist XTB Dr. Przemysław Kwiecień, in which he will focus on the key conclusion of this week - interest rates will rise.

In today's video:

• Inflation persists
• What about this opening in China?
• Inflation level and EURPLN.

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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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