Allianz Chief Economist Ludovic Subran said the US Federal Reserve (FED) may have to raise interest rates in September.
Subran stated that the non-farm payroll data released in the US was actually weak. Despite this, he expressed his belief that inflation could peak above 3.7%, arguing that investments in artificial intelligence, fiscal stimulus, and the energy sector continue to support the US economy.
Subran stated that this situation might force the Fed to raise interest rates in September, adding, “I think this is the main point of contention between Europe and the US.”
Speaking about the European Central Bank (ECB), Subran said he did not expect the bank to take another step following last month’s interest rate hike. “This was an insurance-like rate increase, but looking at the current data, I think that process seems to have come to an end,” Subran said.
Subran also stated that the economic effects of the war with Iran would be felt more clearly over time. He said the economy continues to bear the costs of the war, but added that the current situation is much better than it was a few weeks ago.
