Faced with decades-high inflation, the European Central Bank (ECB) has indicated it will raise its key interest rate from the -0.50 percent, where it has remained for eight years to a positive 0.25 percent this September. However, investors have overestimated the bank’s ability to raise rates aggressively enough to pull inflation back to its 2-percent...
Tag: jun 14 2022
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ECB ANNOUNCES RATE-HIKE PLAN
Attempting to counter complaints that the European Central Bank (ECB) is doing nothing to address inflation, bank president Christine Lagarde last week said the bank is likely to raise its key rate a quarter-point next month and another half-point in September. The decision to announce the raises now was unanimous among the bank’s governing council,...
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BUSINESSES AVOIDING FOREIGN INVESTMENTS
Businesses around the world are scaling back foreign investments because of rising interest rates, lingering fears of new COVID outbreaks, and uncertainties over Russia’s war in Ukraine, the United Nations Conference on Trade and Development said in its annual report on global capital flows. Figures from this year’s first quarter show investment in new facilities...
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OECD TRIMS GLOBAL GROWTH OUTLOOK AMID PERSISTENT INFLATION
The 38-nation Organization for Economic Cooperation and Development (OECD) has pared its 2022 global growth forecast from 4.5 percent, which it forecast in December, to 3 percent, a one-third reduction. The prediction aligns with that of the World Bank, which now says worldwide GDP will expand by 2.9 percent this year instead of 4.1 percent,...
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YELLEN DEFENDS HER SUPPORT OF STIMULUS SPENDING
In her January 2021 confirmation hearing, then-nominee and now U.S. treasury secretary Janet Yellen told the Senate it was time to “act big” to stimulate the economy and pass president Joe Biden’s almost $2-trillion American Rescue Plan to boost the economy and American consumers back to post-COVID financial health. The plan boosted the federal minimum...
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YELLEN DOWNPLAYS RECESSION RISK
“There’s nothing to suggest a recession is in the works” for the U.S. economy, treasury secretary Janet Yellen said in an interview during last week’s New York Times economic forum. “Of course there’s a recession risk,” she added, “but is it likely? I don’t think so.” Yellen tried to buffer increasing pessimism about the economy’s...
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AMERICAN TRAVELERS ARE BACK ON THE ROAD
Even with inflation at a record high, Americans are booking foreign trips for June, July, and August at 97 percent of pre-COVID levels as virus-related travel restrictions ease worldwide, according to data from travel research firm ForeignKeys. Tickets to destinations in the Caribbean are at 109 percent of 2019’s volume, the service reported, with jaunts...
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COMMERCIAL PROPERTY SALES SLOWING
For the first time in more than a year, sales of commercial real estate in April fell, year over year. The value of sales for the month fell 16 percent, year over year, to $39.4 billion, MSCI Real Assets reported, an abrupt reversal of March’s 57-percent annual gain. Before April, sales values had risen for...
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NUMBER OF MORTGAGE APPLICATIONS FALLS TO 22-YEAR LOW
The number of U.S. mortgage applications shrank by 6.5 percent during the week ending 3 June, falling for the fourth consecutive week and reaching the smallest volume since 2002, the Mortgage Bankers Association (MBA) said. Applications for new purchases fell 6 percent for the week; applications to refinance were down 7 percent. Interest rates have...
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SALES OF LUXURY HOMES FALL ALMOST 18 PERCENT
In April, 17.8 percent fewer U.S. luxury homes—defined as the most expensive 5 percent of houses in a given market area—were sold during the three months ending on 30 April, compared to the same period in 2021, the online brokerage Redfin.com reported, the largest monthly decline since the onset of the COVID War in March...