No more cheap money. The world’s central banks have shown their willingness to fight inflation


Both the Federal Reserve and the European Central Bank have said it will limit quantitative easing. In the case of the Fed, in particular, this is a step that few could have imagined six months ago.

At the end of March next year, the US central bank’s securities repurchase program should end. This is the result of a two-day meeting of the Federal Reserve System. In fact, the era of cheap money, which began 12 years after the financial crisis, which was interrupted by record-long economic growth, and which was renewed by the outbreak of the coronavirus pandemic, ends.

Markets are also speculating when the Fed will start raising its key interest rates, which are virtually zero. However, it is practically a given that this will happen already during the year 2022. And it wouldn’t have to stay with a single increase, the US could experience three hikes.

The European Central Bank has also announced the end of the Pandemic Emergency Asset Purchase Program (PEPP). However, the Bank of England, which was the first central bank in one of the G7 countries, decided to raise its key interest rate directly to 0.25 percent.



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