As the year progresses, the idea that interest rates will remain high for longer than expected. Although early forecasts suggested that rates would top out and begin to decline, a number of factors indicate that this period of high rates will become the new normal. But what reasons support this perspective?
The experts of the financial comparator HelpMyCash They present some of the reasons that support the idea of a new period of high rates:
On June 22, the former president of the European Central Bank (ECB), Mario Draghi stated that we are heading towards a world with higher interest rates. According to the Italian economist, “the economy requires high deficits to face the increase in defense spending and the ecological and energy transition, tasks in which private investment cannot assume the burden on its own.”
Later, Christine Lagarde, current president of the ECB, supported this position during a meeting in Portugal and confirmed a new rate hike in July. “It is unlikely that we will be able to say soon that rates have peaked.”, sentenced. And he stressed that he will maintain his financial policy for as long as necessary.
“It is important to note that although rates may fluctuate -that is, go up and down- during this new cycle, the average will be at higher levels than those observed in previous years. The financial situation is dynamic and subject to constant change. The days of zero rates are over.”explain HelpMyCash analysts.