As we move through the second half of 2022 – Rapidly Surging Inflation, Rate Hikes and Recession Risk have now become three of the biggest and most anticipated money making opportunities of the current financial climate that we find ourselves in right now!
There is definitely no denying that Central banks across the world have fallen "way behind the curve" in tackling inflation and now find themselves in a high-stakes race – frantically trying to raise rates too fast, too late – inevitably risking an overshoot that pushes the global economy into a recession.
Just over a month ago, the European Central Bank joined the global "Rate-Hike Club", by raising interest rates for the first time in more than a decade.
And they definitely did it in style with a larger-than-expected 50 basis point hike – in an attempt to play catch-up with the rest of their peers.
A week later, the U.S Federal Reserve raised interest rates by another "super-sized" 75 basis points for the second month in a row – officially embarking on its most aggressive monetary tightening cycle since 1981.
Literally within days, the Bank of England followed in the ECB's and Federal Reserve's aggressive footsteps by unleashing their first "super-sized" interest-rate hike since 1995.
Fast forward to September and we're once again on the verge of yet another blockbuster month for "jumbo-sized" central bank rate hikes.
This week the European Central Bank is expected to hike interest rates sharply after inflation hit a record high in August, driven mainly by soaring energy prices.
Eurozone inflation could enter double digits as early as next month, which could force the EBC to respond with a "market-moving" 75 basis point rate hike this week.
In recent days, those odds hardened after Natural Gas prices on both sides of the Atlantic blasted through all-time record highs – confirming policy makers' biggest fear that inflation is likely to remain elevated for the foreseeable future.
Natural Gas Prices are currently 11 times higher than where they usually are for the time of the year – and we haven't even entered the winter months yet, when prices will enviably boom higher again.
Elsewhere this week, all eyes will be on the hotly anticipated speech by Federal Reserve Chairman Jerome Powell at The Cato Institute Monetary Policy Conference. This will be Powell's first speaking appearance since the Fed's Jackson Hole Economic Summit.
Traders will scrutinize Powell's every comment for fresh clues on the size of the Fed's next interest rate hike this month – which as we know, always has the potential to move the markets significantly!
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions: