December 6, 2023

Wire Service Canada

Complete Canadian News World

Inflation is rising and markets are afraid of economic recovery

Inflation is accelerating and fears of a global economic recovery are growing. The price rush does not exclude anyone: in Germany they rose by 4.5% in October while in the United States they jumped by 6.2%, the largest increase since 1990. President Biden, who fears for his economic policy, says it is necessary to reverse the trend. The rush rattles central banks, giving a boost to hawks and hesitating their commitment to accommodative monetary policy in the face of price hikes that seem less and less transitional. According to the German Council of Economic Experts – a committee of academics established by law in 1963 to present a neutral view of the German government – the European Central Bank should reverse course and put an end to its expansionary policy launched to fight the Covid visa crisis – that price stability is “the best way to contribute in sustainable economic growth. For now, Christine Lagarde appears ready to go her own way and not succumb to hawkish or market pressure, convinced that the price jump is temporary. A hypothesis that, given the data, it looks like a squeak, highlighting generalized increases capable, in the medium term, of eroding purchasing power with recovery consequences. The game in the United States is more complicated. Rising prices threaten to disrupt President Joe Biden’s economic agenda, which is not designed to tackle inflation at least in the short term. “Reversing inflation is the priority,” the US president said, acknowledging that the fire was beginning to be felt on Americans’ wallets in light of the Christmas holidays with an expensive cart and above all with exorbitant energy. This has led to a 6.1% increase in gasoline prices compared to September and 50% since the beginning of the year. Biden explained, “I directed the National Economic Council to pursue ways to reduce energy prices,” which Democrats are demanding to consider an oil export ban and the release of strategic reserves to calm prices in the face of OPEC’s refusal to increase production.

READ  Plastic shards in food, urgent recall

Reproduction is reserved © Copyright ANSA