ECB to raise rates slower than Fed

The ECB is planning to raise rates slower than the Federal Reserve. This will lead to the euro declining against the USD.

https://wellsfargo.bluematrix.com/links2/html/cb8eb8a5-0c6f-…

Wendy

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Will it also lead to a softer landing for ECB countries in the coming recession caused by limited credit?

<Will it also lead to a softer landing for ECB countries in the coming recession caused by limited credit? >

I don’t know. Each nation in Europe has its own central bank. In 2010, there was a nasty crisis with the high-debt countries (so-called “PIIGS”) suffering while Germany scolded them for being so improvident.

Wendy

I can not fully speak to short term borrowing by EU governments.

Longer term the EU nations will be borrowing more not less. Their ideology is changing places with us towards supply side econ. We are moving into demand side econ. We know supply side econ runs on much more debt regardless of what is promised us. This because GDP growth is less. Tax revenues are less. With a depreciated currency there is in fact less of an advantage as commodity prices in relative terms pre taxes are higher as input costs.

The US will be moving towards balanced budgets in a milieu of higher taxes on the wealthy. Who can easily afford them. Opinions to the contrary are fictions. Or wishes to be one of the wealthy not paying much in taxes, self deceit.

The alternative of the EU not moving towards supply side econ was China doing so, but Xi is postponing the process unbottling massive inflation and a impending financial collapse. The Chinese will be riding on a sub rail as a nation in the cyclical nature of economies. The depegging from the USD has to fully happen and it will be painful.