What will be sacrificed?

New data from the American economy are so good that I am honestly scared of them.

 

For example, the number of applications for unemployment benefits published today is the lowest in 43 years. The job market is probably moving around the point of full employment. That should be a somewhat notional goal of economic politics. Now the politicians should try to keep the economy around this point. The unemployment rate is making only 4.6 % in the USA. The lower unemployment rate would push the inflation unhealthy upwards. So the politicians shouldn’t try for the lower unemployment rate anymore.

 

On the contrary, the economy needs to be suppressed a little bit. But it needs to be done very carefully. That’s why the central bank will be measuring on medical scales how many times it is going to raise the interest rates. The financial market is currently not doubting that they are going to be raised at least twice this year in the USA.

The economy is certainly not in such a good condition in Europe. Either way, that is not true in all of the states. While the south of the Europe is suffering and young people basically can’t get a job there, the unemployment rate in Germany is the lowest since the year 1990. That’s why the German economists publically asked ECB today to raise its interest rates. So once again: Part of people is fearing the inflation and part of people is again fearing the bankruptcy of the south of Eurozone. I would bet that ECB lead by Southerner – Italian – will prefer south of Europe in the end and won’t raise the interest rates.