2023-08-19 09:00:00
Reserved for subscribers
CHRONIC. If headline inflation is still 4.5% at the end of 2023 and 4% at the end of 2024, the Central Bank will have to act.
By Patrick Artus A field in Munwiller (Haut-Rhin), June 26, 2023. The prices of agricultural products will probably stabilize at a high level in 2023 and 2024. © Sébastien Bozon/AFP Published on 08/19/2023 at 09:00
It looks increasingly likely that the ECB will soon stop raising interest rates. The “terminal rate” will probably be 4% (for the rate of bank deposits at the ECB) and 4.5% (for the rate of repos – bank refinancing by the ECB).
The ECB is concerned about the effects on the economy of higher interest rates, in particular on residential and commercial real estate. A 20% drop in retail and office prices would have serious consequences for banks and investors. Furthermore, the ECB is sensitive to the need to invest enormously – at least 3 points of GDP – to achieve the energy transition.
Finally, growth in the euro zone was 0.15% in the first half of 2023 and the economic indicators are at a fairly…
I subscribe
#delicate #question #stopping #rise #interest #rates