5 May 2023 – The EU is planning a new sanctions mechanism against third countries, which could include steel products. And after this week’s interest rate hikes by the Fed and the ECB, there are many indications that inflation will continue to fall and the global economy will stabilise.
EU plans new sanctions mechanism
The European Union (EU) is reportedly considering a new sanctions mechanism to target third countries in order to combat circumvention of Russia sanctions more effectively. The instrument would be aimed at deterring countries from supporting Russia and disrupting trade channels that Moscow may be exploiting.
The measures were unlikely to target China at first, but focus mostly on nations in central Asia and Russia’s immediate neighbors, the people added. But also India, which besides military goods also buys large quantities of oil and coal, but also steel from Russia, could be in the eye of the EU sanctions watchdogs.
Proposed measures include iron and steel
The new mechanism would allow the EU to impose targeted restrictions on key goods if existing deterrents do not work. Proposed measures include making it easier to impose sanctions on companies in third countries that circumvent EU sanctions and extending existing bans on cars, advanced technologies, industrial goods and iron and steel.
Focused on stability: FED and ECB raise key interest rates
The European Central Bank and the US Federal Reserve have both taken steps to control inflation in their respective economies. The ECB has decided to slow its rate hike, giving banks in Europe more time to adjust to the changes.
The US Federal Reserve raised the key interest rate for the tenth time in a row, showing that it is determined to counter inflation. The Fed’s decision to monitor the impact of its policy gives hope that future decisions will be well-considered and balanced. Overall, these are positive signals for economic stability in Europe and the US.
Further drop in inflation expected
A quick look at ING‘s forecast inflation developments in various countries and regions for the coming quarters until 2025, paints an interesting picture and shows expectations that inflation will continue to decline significantly in the coming months. In the eurozone and the United States in particular, ING analysts expect inflation to fall by up to 50% by the fourth quarter of 2023.
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