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Inflation and monetary policy: these are the biggest worries in the markets now

2021-11-09T08:07:45.876Z


Corona brought the financial markets to collapse. But now inflation and tighter monetary policy are replacing the pandemic as investors' greatest concerns. The willingness to take risks remains higher than it has been since 2001.


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A supermarket in the USA: Inflation is not only a concern there

Photo: Sun Ruibo / dpa

Despite high infection rates, the pandemic is no longer the biggest bogeyman on the US financial market.

They were replaced by two other factors: the threat of higher inflation and a possible tighter monetary policy.

This was the result of a survey by the US Federal Reserve, or Fed for short, among market participants, which it published in its semi-annual report.

In the survey, participants were asked to indicate what they saw as the greatest risk for the next 12 to 18 months.

Around 70 percent of them named inflation and monetary policy.

The report goes on to say that investor risk appetite is higher than it has been since the 2001 dot-com boom.

However, the framework conditions could change quickly if the pandemic worsens or the economic recovery falters.

The high number of infections would therefore have less of an impact than last year.

The different Corona variants have not changed anything so far: "Despite the tragic human toll, the Delta variant has only had a limited impact on the US financial markets," the report says.

The economy has recovered strongly since the first corona wave in 2020.

In Germany, inflation is higher than it has been in a long time

Not only in the US financial markets are there worries about inflation.

In Germany, too, some economists are warning of the consequences of the price increases.

In October these had climbed to 4.5 percent and thus rose more than in 28 years, as the Federal Statistical Office announced.

The reasons for the sharp increase are, among other things, rising energy prices, material shortages and delivery bottlenecks.

In addition, there are price increases due to the CO₂ tax.

Other experts give the all-clear: "A significant part of the increase in recent months is mainly due to the economic aftermath of the pandemic," said KfW chief economist Fritzi Köhler-Geib at the end of October.

She expects inflation rates to fall again next year.

In the corona crisis year 2020, inflation rates were exceptionally low, in some cases even negative.

jlk / Reuters

Source: spiegel

All business articles on 2021-11-09

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