Inflation in the United States climbed to 7.5 percent year-on-year in January, the highest level in 40 years. This increases the chance that the central bank will raise interest rates even more aggressively than previously thought. Fed chief James Bullard said interest rates should be raised by 1 percentage point in the first half of the year. Stocks in New York ended with losses of up to 2.1 percent. Stock markets in Asia also showed red numbers on Friday.
European Central Bank (ECB) President Christine Lagarde warned that too rapid a tightening of monetary policy could slow the economic recovery from the corona crisis. She said raising interest rates would “solve none of the current problems,” she told Redaktionsnetzwerk Deutschland. Lagarde recently said it would not rule out an interest rate hike this year, while the ECB previously did not foresee a rate hike before 2023.