FT News Briefing Switzerland’s historic rate rise rattles markets
Jun 17, 2022
Markets are on edge as major central banks, including those in the UK and Switzerland, raise interest rates to combat inflation, causing significant stock declines. In Europe, a severe energy crisis unfolds as Russia slashes gas supplies to Germany, prompting urgent calls for energy conservation. Meanwhile, COVID hospitalizations are rising due to new variants, putting pressure on already strained healthcare systems. This mix of economic and health challenges leaves many wondering what lies ahead for the continent.
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Market Impact of Rate Hikes
- Global stock markets are declining due to rising interest rates in the US, UK, and Europe.
- These rate hikes are a response to escalating inflation concerns.
Fed's Aggressive Stance
- The Federal Reserve implemented a substantial 0.75 percentage point interest rate hike, the largest since 1994.
- This aggressive move signals their determination to combat inflation, even at the risk of a potential economic downturn.
Swiss Rate Hike
- The Swiss National Bank raised interest rates for the first time since 2007, marking a global trend.
- Even with this increase, Swiss benchmark rates remain negative, indicating the widespread concern about inflation.