Investors are increasingly worried about inflation and the economy

Frankfurt The central banks have a tighter grip on the capital markets than ever: the European Central Bank (ECB) has caused significant losses in equities and bonds since Thursday. ECB President Christine Lagarde had previously announced the first interest rate hike in eleven years in view of the persistently high inflation and promised another one for September.

Then, on Friday, a surprisingly significant rise in price levels in the USA fueled fears that even more tightening of US monetary policy could stall the economy. Market strategists are therefore also anticipating turbulent stock markets in the new week.

“The stock markets groan under inflation concerns, as well as supply chain problems and dwindling economic confidence,” summarizes Ulrich Kater, chief economist at the savings bank securities subsidiary Dekabank.

On the bond markets, a sharp jump in inflation expectations would have depressed prices and “dramatically pulled up” yields.