Global shares ease ahead of the ECB's rate decision, while US futures edge higher
Business InsiderMAY 2022
The ECB has recklessly been sitting on its hands while Europe plunged into a tide of rising prices and ineffectual aid packages. Although the ECB seems to have finally recognized the need for monetary tightening, it's wasting a crucial moment in the fight against inflation by delaying the hike until July.
The ECB is right to proceed cautiously. It's in the tricky position of having to balance tightening efforts to tame inflation while maintaining stability in the sovereign-bond market. To be overly aggressive could trigger a new sovereign-debt crisis and recession, but to do nothing could be just as damaging.
The eurozone is facing paltry growth and soaring inflation - the very definition of "stagflation" - and that's the good news. The bad news is that the eurozone has been suffering through it despite eight years of negative interest rates and loose monetary policy. What happens now that the era of "easy money" has come to an end is anyone's guess.