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Debt-hungry American companies are flocking to Europe as interest rate cuts fuel $33 billion ‘Reverse Yankee’ effect

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Consumer Price Inflation

Issuance of European debt could be on track to break records as the Eurozone gets the jump against the Fed in cutting rates.

A surprise drop in inflation in the Eurozone is helping the continent get a head start on interest rate cuts ahead of its long-dominant U.S. peers. Now businesses in the country are starting to realize they may get a few perks of their own by leaning into this unusual dynamic.

New interest in European debt has been fuelled by a divergence in monetary policy between the U.S. and Europe, the latter of which has surprised with a rapid slowdown in inflation.Consumer price inflation in the Eurozone fell to 2.4% in March, approaching the ECB’s target rate of 2%.of the U.S.’s first-mover status that had stood since the turn of the century. The Eurozone is expected to cut rates in June.

Stimulus introduced to ward off the effects of lockdowns was followed by Joe Biden’s mammoth inflation reduction act , pushing public debt to 121% of GDP. France is dealing with lower levels of economic growth than in the U.S, making it harder for investors to justify confidence in the country’s debt.

The mystery is over: Warren Buffett’s Berkshire Hathaway disclosed a major stake in the insurance company Chubb, finally revealing the investment he has kept under wraps since last year.Michael Burry is in the news for two reasons. One, he has revealed his Q1’2024 portfolio that shows Burry is once again swimming against the tide .

Source: News Formal (newsformal.com)

Consumer Price Inflation

 

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