Although the Fed is perceiving that inflation is likely to return to normal levels, it has been trending upward for longer than expected. While economic policy is still focused on expanding vaccines and suppressing the spread of the delta mutation, it is disconcerting that the supply chain bottleneck will worsen rather than improve next year.
“Oil prices reach $100, sparking an economic crisis”
According to experts, soaring oil prices could trigger another global economic crisis following the 2008 financial crisis.
In Bank of America’s September forecast, if this winter is colder than usual, oil prices could reach $100 within six months.
In Europe and Northeast Asia, natural gas prices have jumped to about $190 per barrel when converted to international oil prices, according to Standard & Poor’s (S&P) Global Platts.
Rising interest rates in every country
Central banks around the world are raising interest rates despite the economy still not recovering from the pandemic.
In September, the ECB began tapering its bond purchases. The Fed has predicted it could raise rates six times by 2024, starting next year.
On the 22nd of last month, despite the pandemic, Brazil raised its policy rate by one percentage point to 6.25%. This could be followed by another one percentage point increase this month.
Norway, the Czech Republic, Mexico, Colombia and Chile join the list of rate hikes.
Norway abandoned its zero interest rate policy on the 23rd of last month and raised its prime rate to 0.25 percent, while the Czech Republic raised its interest rate by 0.75 percent on the 30th. This rate hike shocked the market, which expected a 0.5 point increase.
Mexico also raised its key interest rate by 0.25 percentage points to 4.75 percent on the 30th of last month.
Similarly, Colombia raised its policy rate to 2 percent on the same day by 0.25 percent.
Chile raised its policy rate by 0.75 percentage points in August, from 0.75 to 1.5 percent.
Since the pandemic, inflation has soared: Prices have risen across the board, from energy to grains, which has put pressure on the global economy.