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SPX Managing Partner Ruggero Xavier estimates that the bank’s failure in the US should lead to a “reversal of central banks”, especially those in the US, that could halt the rise in interest rates. In Europe, the European Central Bank (ECB) may have to raise interest rates less.
“We’ve seen risks associated with financial stability in the past week,” said Xavier. “A banking crisis has begun to emerge in some countries and some advanced centers,” he said at Safra Invest.
Amid the onset of banking turmoil, central banks may begin to look more closely at financial stability and less at inflation. “If we can get the banking crisis under control that started in the last few days, I find it difficult to get inflation below 3%,” said the manager. “This inflation is more stable than one might imagine.”
Xavier estimates that the US continues to show signs of doing better than other economies. The director also believes that central banks have reached the apex of interest rate hikes.
People believed that the dollar would weaken and US interest rates would peak in the 2022-2023 round. “What we’ve seen is that the US is still the main economy and continues to show signs of better performance.”
Xavier said recent data shows that the US job market is “very strong” and that American consumers are still consuming. In Asia, he commented on the opening up of China and the stimulus of the economy adopted by Beijing. Combined, these factors should not lead to a deterioration in commodity prices.
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