Inflation is high and the Fed has to raise rates to slow demand: the US central bank has room to raise the cost of money and has to keep going until there are clear signs that prices are falling. This was stated by the president of the Kansas City Fed, Esther George, in an interview.
Meanwhile, at the meeting of the ECB on 21 July “the members noted that there are growing signs of a decline in economic activity in the euro area that could extend until 2023”, read the minutes of the July Governing Council meeting. .
In manufacturing, the indicator had contracted “for the first time since mid-2020”, and survey data on new orders and business expectations “suggested that this weakening would continue in the coming months”. Furthermore, consumer confidence has fallen to an all-time low and inflation is eroding real income wealth.