Will the central banks’ change in strategy soon lead to a turnaround in interest rates?


The US Federal Reserve will reduce its bond purchases later this year – Fed Chairman Jerome Powell announced at a meeting of the central bankers in Jackson Hole recently. And the European Central Bank will also tighten its ultra-loose monetary policy this year. However, both ECB boss Christine Lagarde and Powell still leave the exact timing and scope of the tightening open.

So far, investors and shareholders have reacted in a relaxed manner to the initiation of this deliberate change in strategy. Company editor and stock analyst Ulf Sommer explains the circumstances under which this could change. Above all, the further course of action of the central banks depends on whether the current high inflation rates in Europe and the USA will persist temporarily or in the longer term. In the current episode of Today Extended, Ulf Sommer explains whether a reduction in bond purchases would inevitably lead to a turnaround in interest rates, which sectors would suffer from rising interest rates and which would benefit.

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