(Finance) – The euro / dollar cross stable in the 1.05 area the day after the president of the European Central Bank, Christine Lagardeis back to talk about shield against fragmentation, that is, the possibility that financial conditions will tighten more rapidly in some countries than in others. The instrument – said Lagarde – will be “effective” and “proportionate” and will be ready by the Council of 21 July next. “Anyone who has doubts about our determination makes a mistake” – commented the number one of the ECB – even if it must be said that at the moment neither details nor timing of the “instrument” are known.
The insiders are now looking at the interventions of the Federal Reserve Chairman, Jerome Powell, in Congress, scheduled for tomorrow and Thursday. Clues are being sought on the Fed’s future moves to curb inflation.
Last week the US central bank surprised the markets with a 75 basis point rise, in line with what was leaked a few days earlier, “forced” by higher-than-expected May inflation. The Fed left open the possibility for another 75-point hike in July, noting that hikes of this magnitude are not the new normal.
The attention of the markets therefore remains high for one more aggressive monetary tightening than expected, which risks weakening the world economy even more, while there are already those who see the specter of stagflation.