Euro markets are lowering their profits after the data on inflation in the US

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European stock markets are significantly lowering their profits after the data on the course of inflation in the US, which again exceeded the estimates of analysts, disproving the hopes for a rapid de-escalation of inflationary pressures.

The data showed that the consumer price index increased in April by 0.3% from the previous month and by 8.3% on an annual basis, after rising in March by 8.5%. Analysts’ average estimates in a Reuters poll were for an annual rise of 8.1% in inflation.

The Federal Reserve has already raised interest rates by a total of 75 basis points and is expected to raise two more. by 50 basis points each time, during the summer, as part of its effort to curb the frantic price rally. The Fed’s aggressive campaign to tighten monetary policy has sparked fears even of the risk that the US economy could slide into recession in the coming months.

On the board, the pan-European Stoxx 600 index gained small gains of 0.1% to 420.78 points, having previously surpassed 426 points.

The German DAX gained 0.3% to 13,575.51 points, the French CAC 40 rose 0.8% to 6,164.60 points although it was found to record a 2% jump to the highs of the day, while the British FTSE 100 is moving with small gains of 0.2% to 7,259.88 points.

In the region, the Italian FTSE MIB gains 0.7%, while the Spanish IBEX 35 gains 0.5%.

At the same time, data released today in Germany showed a jump in annual inflation to 7.4% in April, the highest level since 1981. With consumer prices recording a steady rally across Europe, European Union officials Central Bank are beginning to talk about the need to adjust monetary policy in Europe as well.

ECB President Christine Lagarde said today that the first rate hike in more than 10 years could come a few weeks after the end of the bond-buying program early next quarter.

“The first rate hike will take place sometime after the end of the asset market,” Lagarde said. “We have not yet set exactly when, but I was very clear that this could mean a period of just a few weeks,” she said in a speech in Ljubljana today.

For his part, the Governor of the Central Bank of France, Francois Villeroy de Galhau, estimated today that the ECB will start raising interest rates gradually this summer. “I think from this summer on, the ECB will gradually raise interest rates,” Villeroy told French radio.

ECB Executive Board member Frank Elderson also noted that bank officials will be able to begin considering interest rate hikes from July to address high inflation.

Source: Capital

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