Central banks are recently viewed with great fear by savers and even ordinary people.
It can be said that in recent months central banks have truly ended up at the center of the debate political and economic.
The fact is that with their choices of rigor land central banks risk triggering a real stock market crash but also the bursting of the dreaded real estate bubble.
So many risks with rising rates
Yet these are not the only risks of the new course of central banks around the world. Let’s see what’s going on.
The Federal Reserve in the United States and the European Central Bank in Europe are moving with great dynamism to try to stem inflation. In fact, inflation is now at 8% in Italy and 9.1% in the United States. These are roughly the figures of high inflation throughout the West and consequently the only way to stem this terrible phenomenon is to raise rates.
Many criticize them
The central banks of the United States and the European Union they decided to take this path also because at this point it is the only one possible. But there are three major risks associated with rising interest rates that are literally shaking savers in Europe and the United States. First of all, with the increase in rates there is the risk of a real collapse on the stock market. In fact, many argue that the US stock market and many others around the world are absolutely swollen by too many years of zero rates. So a rate hike right now could kick in to a real domino effect of collapses. But the risk is also that of the bursting of the housing bubble.
The real estate bubble
In fact, many analysts are arguing that a real real estate bubble like that of 2008 could burst in fact, the whole mortgage machine in the United States has already started a mighty slowdown. But perhaps the greatest risk is precisely that of bringing about the dreaded economic recession. In fact, with a turn of rigor as regards the rates charged, central banks could effectively plunging Europe and the United States into recession and thus making life much more difficult to families and businesses. The center-right political factions are protesting against the choice to increase rates but unfortunately it appears the only possible way against inflation.
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