At the end of this trading week, the tension in markets around the world is truly palpable.
The week ends with truly thunderous thuds of the stock exchanges around the world.
In fact, markets are all over the planet really losing a lot and the reason according to analysts is very clear.
Stock exchanges are afraid of central banks
Central banks have abandoned all fears and in order to stem inflation, they are willing to do anything.
Let’s try to understand what is happening. At the beginning of this 2022, many analysts were fearful that inflation would be a huge problem for the world economy. However, central banks have not listened to these analysts and have continued to go their own way. So throughout the beginning of 2022, central bank rates were very low. Precisely this has allowed inflation to become a real monster and the results are there for all to see. For some months the central banks have changed their attitude and made it clear that they would intervene against inflation.
Rates will rise at all costs and the stock markets are shaking
A whole series of rate hikes have gone in this direction. But until this week, central banks still appeared fearful of the rate hike. In short, until this week the widespread idea was that central banks would raise rates but if things in the bag got bad they would immediately come back. But today the widespread perception on the markets is completely different. The idea that reigns supreme now is that the central banks are also willing to bring down the stock exchanges in order to stem inflation.
Vigorous rate hike and the buyback is no longer valid
So the rate hike will and will be a lot vigorous. The idea that dominates today is that even if the European Central Bank or the Federal Reserve should see the stock exchanges panic and in the context of a real collapse, the increase in rates would continue without particular collections. The bag therefore no longer feels supported and pampered by central banks and their zero rates and panic is perhaps really beginning to spread. Lawful but ambiguous operations such as the buy back today they become less convenient but it is above all the idea that the fight against inflation has become a priority over the health of the markets that is scary.
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