Plans to tighten monetary policy were announced at the recent meetings of the Central Bank of Australia and the Bank of England. During the next five-day working day, several countries of South America, Serbia and the Philippines will hold meetings of the Central Banks. Regulators are likely to confirm the trend of tightening monetary policy in order to strengthen regional currencies and weaken the dollar.
The US inflation figures coming out next week will be another factor in the decline in the value of the American currency. Weak consumer price growth will confirm Jerome Powell’s forecasts. The head of the US Federal Reserve earlier warned investors who are actively throwing capital into short-term bonds, amid a surge in inflation, that its rise is temporary and not systemic.
Powell’s correctness in the instability of the US economy and the justification for long-term soft monetary policy was proved last week by failed labor market reports. The number of new jobs turned out to be much less than analysts’ expectations, and the growth of unemployment was higher than forecasted.