Is it a turning point that the European Central Bank (ECB) announced its first rate hike in 11 years on Thursday? In any case, financial markets must “adapt to the fact that the ultra-easy monetary policy phase is now over,” said Monika Rosen, former chief analyst at Bank Austria and vice president of the Austrian-American Society. The stock market expert was a guest at the TV discussion of “Club 3” by “Kronen Zeitung”, “Kurier” and “profil”.
But anyone hoping to earn decent interest on their savings account again soon will be disappointed. The increase is only a quarter of a percentage point. According to Rosen, central bankers are heatedly discussing raising interest rates by half a percentage point in September. Yet saving remains a loss-making company “when inflation is already eight percent”. In other words, the money in the bank with a low interest rate is worth significantly less this year.
According to Rosen, the reason the ECB is hesitant to raise interest rates is that the eurozone is a “heterogeneous economic area”. To put it in plain Dutch: some countries such as Austria, Germany or Sweden are doing well economically. But other countries, especially southern countries, are heavily indebted and it would weigh heavily on them if the interest burden were much higher.
But if saving doesn’t pay – where do you put your money to save purchasing power? Rosen is a bit perplexed: because when it comes to equities, many Austrians are afraid of price losses. Real estate, on the other hand, has become much more expensive and it is unclear whether prices will continue to rise or whether the wind in the market will change.
Rosen advises to “seek a conversation with the bank advisor you trust”. Because everyone has different goals and different risk behaviour. One thing is certain for her: “We have all come out of the different crises. That will be the case now too!”
In “Club 3” editors-in-chief of “Krone”, “Kurier” & “profil” talk to guests from politics, business and the media.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
