Enlarge image
Fighting doubts:
ECB boss
Christine Lagarde
emphasizes at every opportunity that the central bank will achieve stable prices again
Photo: Thomas Pirot / DER SPIEGEL
Star economist
Mohamed El-Erian
(64) calls it the "Day of Reckoning": On June 10 at 8:30 a.m., America's statisticians reported the highest inflation in more than 40 years.
Bitter news for the Americans, but the realization behind the news is even more bitter: the central bankers of the American Federal Reserve, the Fed, have lost the sovereignty with which they dominated the world financial market for decades.
El-Erian, president of Queen's College Cambridge and chief adviser to Allianz, was one of the few economists who saw the renewed rise in prices (8.6 percent for May) coming.
The markets reacted with surprise, and prices fell.
Fed boss
Jay Powell
(69) had to frantically improve and raised interest rates by 0.75 percentage points, unexpectedly sharply.
Enlarge image
The center of power:
Fed Chairman
Jay Powell
in the Washington headquarters of the US Federal Reserve
Photo: TJ Kirkpatrick / Redux Pictures / laif
Unexpectedly, this word should not actually appear in the language of central bankers.
But elsewhere, too, the currency watchdogs were caught off guard.
The British reacted.
For the first time in 15 years, the Swiss National Bank raised its key interest rate.
And Christine Lagarde (66), President of the European Central Bank (ECB), convened an extraordinary "ad hoc" switch of the Governing Council - although it had just discussed in detail.
For two days, just before June 10, the euro custodians sat together in Amsterdam to agree on their timetable for a slow "journey" (Lagarde) to higher interest rates.
After the reports from the USA, the French woman drummed up her round from a London hotel basement again via video to formulate an emergency message: In view of the "current market situation" the planned financial tool to stabilize the bond markets will now be developed "more quickly".
Only a little later, when the next interest rate decision was made in July, it became clear to everyone that Lagarde's slow journey could turn into a hunt.
Euro inflation headed for a new record of 8.9 percent.
Instead of 25, the ECB raised interest rates by – also unexpected – 50 basis points.
It was the first increase in over ten years, the leap out of negative interest rates.
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