Many alarms on the international economy and clearly the stock exchanges are affected. In the United States, inflation is even higher than in Italy.
In fact, if Italy is currently at 8% inflation in the United States the values are even more dire and there is a strong fear of recession.
The whole world can go into recession due to the strong economic crisis and high inflation.
Central banks and fear of recession
But central banks are particularly frightening.
In fact the central banks they have clearly announced that they want to pursue a strong interest rate hike policy. So central banks absolutely need to raise rates to try to curb the gallop of inflation but at the same time know that this opens the door to recession. The economic recession appears increasingly probable and it is the countries themselves fragile like Italy to suffer immediately. In fact, the Italian spread flies over 200 basis points and this is not too surprising.
The risks for Italy and social issues
In fact, Italy is a country that has strong weaknesses and we know very well that the European Central Bank and the European institutions will most likely demand austerity from our country. Yet the Italian government will find itself called upon to apply rigid austerity precisely when the country it needs more social aid. In fact, the Prime Minister Draghi has announced that it will already be approved at the end of July a new decree with as much as 10 billion in new social aid. However, when Italy actually entered recession and the European authorities began to demand austerity and rigor, it is not absolutely clear whether the government it will still be able to afford aid of this magnitude.
Stock exchanges under great pressure around the world
In the meantime, the stock markets obviously suffer from strong tensions and nervousness because the rise in rates and the fear of recession they can trigger real collapses. In recent months, the simple announcement of a more restrictive policy by the central banks has already been enough determine truly negative performance for all major stock exchanges in the world. Analysts are pessimistic and foresee market storms and social tension.
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