The European Central is close to raising interest rates for the first time in 11 years.

The European Central Bank may decide to increase the rate hike in today’s
meeting from a quarter point to a half percent due to the ongoing price increase,
which is causing families, businesses,
and governments in all 19 euro-area countries to express increasing anxiety.

While the rate hike by the European Central Bank is long overdue,
it brings it closer to more than 80 central banks that resorted to this step,
but it also tracks the likes of the Federal Reserve,
and with the start of work the reasons to be wary increase as the immediate threat of economic chaos has been postponed.

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Russia’s gas

Russia restores gas flow through Nord Stream 1

Japan faces high inflation by keeping rates below.

Russia’s gas

cuts on Thursday resumed flows through the Nord Stream 1 pipeline,
and recession risks in Europe remain
and will increase if Russia carries out its threat to halt winter energy supplies.

At the level of Italy and the political crisis in which Mario Draghi resigned as prime minister this morning,
this demonstrated how quickly we can see the severity of the tension in the government
bond markets at a time when the euro fell to parity with the dollar. Ultimately,
this resulted in record inflation reaching quadruple the 2 percent target.

The last meeting of the European Central Bank in June made an extraordinary commitment to raise interest rates
by a quarter point this month to –0.25 percent to increase at the September meeting
if inflation expectations do not improve.
The markets are anticipating the decision made at today’s meeting.

artical name The European Central is close to raising interest rates

Russia restores gas flow through Nord Stream 1

reducing tension in Europe

Following a brief suspension of maintenance work
Russia started supplying natural gas to Europe via the Nord Stream 1 pipeline.
This action helped the continent of Europe feel some relief following
the worsening of its winter energy crisis at a time when the euro countries’ economies are subject to fluctuations
because of the pressure of a lack of supplies.

And the data issued by the gas line operator that shipments returned to work at 40% of their capacity,
and natural gas prices fell by 6.5% before these losses were reduced.
Russia has been limiting gas shipments to Europe for months at a time
when European countries depend on what little it gets to fill underground water tanks
and fuel depots in order to weather the winter.
Russian President Vladimir Putin has indicated that flows will drop to 20% as soon as next week,
due to a malfunction in two turbines, one of which needs maintenance this month,
and flows will decrease in the event that the alternative
from Canada does not reach Russia soon due to the delay related to sanctions.

After Russia’s invasion of Ukraine, European gas prices increased in 2021 to record levels,
driving up consumer costs. Additionally, as a result of the complete and potential closure of the Russian side,
which the IMF warned would expose Germany to the risk of losing 5% of its economic output,
there were also growing concerns about a global gas shortage.

artical name The European Central is close to raising interest rates

Japan faces high inflation by keeping rates below.

Bank of Japan Governor Haruhiko Kuroda is determined to stick to ultra-low
interest rates even if it costs him further weakness in the Japanese yen.
At a time when the European Central is seeking to increase interest rates,
and the fear of a sharp decline in the global economy contributed to
the rush of central banks to confront and treat inflation in alleviating
market pressure on the Bank of Japan, and this gave the opportunity for
the Governor of the Japanese Central Bank to continue with a short-term interest rate of -0.1%
and a ceiling 0.25% on a 10-year return despite its negative impact on the yen and weakening it.

The average inflation is expected to reach 2.3% for the year ending March,
which is very far from the explosive growth in prices abroad,
but at the same time the Central Bank expects to achieve price gains for the first time at the target levels of 2% this year,
excluding the impact of increasing the sales tax.

Observers believe that the combination of high price expectations
and non-high growth appears to be a typical hedge for the central bank in order to keep its options open,
and if the global economy avoids a major slowdown,
prices may continue to grow at a strong pace,
and it must learn the experience of the Reserve of Australia at a time
when it waits too long to reach the inflation target
and risk remaining pessimistic just to reach sustainablely high inflation.

The European Central is close to raising interest rates

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