MeterU.S. investors don’t care if the inflation target is European Central Bank (ECB) Will it even reach 2% in the future, instead of “less than but close to 2%” as before? Many savers may say: “I don’t care.” One might think that it doesn’t matter whether the savings in the final account are consumed by 2% inflation or not exactly 2% inflation.
But the new central bank strategy proposed by European Central Bank President Christine Lagarde on Thursday is absolutely relevant to investors: in particular, if the central bank wants to accept that inflation “moderately” exceeds its target for a period of time, this may mean It keeps interest rates at a lower level for longer. The German Banking Association said that the impact of negative interest rates on depositors may be longer than expected.
Governor of the Bundesbank Jens Weidman Friday tried to ensure that the European Central Bank would not consciously target an inflation rate above 2%. “Achieving 2% inflation in the medium term is a clear and easy-to-understand goal. Our goal is not to lower or raise interest rates. This is important to me,” Weidman said. However, Eugen Keller, a capital market expert at Frankfurt Bank Metzler, said that monetary policy tends to be more “deaf” now, meaning that it will remain accommodative for a longer period of time.
Holding cash becomes less attractive
What does this mean for savers? If the European Central Bank also allows inflation to be higher than 2%, the attractiveness of holding cash may be even lower. There are still about 2.6 trillion euros of German depositors in the current account. However, even with overnight and fixed deposit offers, it is currently difficult to beat the 2% inflation rate.
On the other hand, Dax may even benefit from a slightly higher inflation rate, saying Andreas Helkamp, Stock expert of Commerzbank. “For the stock market, it is very important that the European Central Bank will react more calmly to rising inflation in the future, because the stock market in the euro zone continues to rely on central bank capital injections,” Hürkamp said. The change in the course of the European Central Bank is a signal to the stock market that the relatively high valuation of the euro zone stock market will continue for the time being: “Because of the low interest rate environment and the very loose policy of the European Central Bank, it is increasingly forcing and even risk-averse investors. Take more risks to buy stocks that are already high in value.”
This Dax According to China’s economic data, the index fell sharply on Thursday, but rebounded on Friday, closing at 15,688 points.
Franklin Templeton Funds’ Eurobonds director David Zahn said the consequences of the bonds are unclear. “The European Central Bank’s new policy is largely a continuation of the current monetary policy, setting 2% as the inflation target,” Zahn said. “We will have to wait for the next European Central Bank meeting in order to better understand what will happen to operational implementation.” First, the bond market continues to benefit from generally loose monetary policy.
Steel Zinsstrukturkurve
Ulrich Stephan, chief investment strategist for private and corporate clients at Deutsche Bank, said: “The market is still arguing about the level of inflation that the central bank can tolerate in the future.” Nevertheless, discussions on reducing bond purchase plans are likely to lead to an increase in long-term capital market interest rates. He said that inflation expectations may unexpectedly rise.Investors should prepare for a “steeper yield curve”: short-term interest Staying close to zero for a period of time, long-term yields may rise, and bond prices fall accordingly. However, the recovery trend of the global economy should lead to an increase in company sales, which should fundamentally support the stock market.
“Given the continuation of the hyper-expansionary monetary policy and the possibility that yields may even fall further, there are many arguments to support the recovery of gold,” said European Central Bank President Eugen Keller (Eugen Keller). Metzler BankOn Thursday, the price of gold rose to US$1,817.64 (31.1 grams) per troy ounce, but then it calmed down a bit, sometimes even slightly below US$1,800 on Friday.
In addition to the inflation target, many aspects of the European Central Bank’s new strategy may also affect investors. Ulrike Kastens of DWS Funds said: “The most far-reaching decision is of course the decision of the European Central Bank, not just talking about climate protection, but developing an ambitious action plan.” “The European Central Bank’s corporate bond portfolio will also Affected-this news alone may trigger a signal effect.”
