“A good thing”
Top economist expects another stock crash
January 31, 2022, 6:10 p.m
The global stock markets have completely decoupled from the real economy, says DIW boss Marcel Fratzscher. The economist therefore expects a setback of up to 40 percent. “We need a correction,” he says in the ntv economic talk “How safe is our money?”.
The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, assumes that the stock markets will rush even deeper into the basement. “We need a correction in the stock markets of 30 or 40 percent. I expect that for the next two years,” says the economist in the ntv Wirtschafts-Talk “How safe is our money?”.
The global stock markets have completely decoupled from the real economy. “I think a correction is a good thing,” Fratzscher continued. For the German economy, the price losses he expected did not pose a problem: “For the real economy, that doesn’t mean anything at all,” said the DIW boss.
The stock markets are under pressure in view of the interest rate turnaround initiated by the US Federal Reserve. Currently, the general expectation is that the first rate hike will take place in March. Rising interest rates make stocks less attractive compared to other asset classes. Tighter monetary policy also dries up liquidity in the market.
The Dax has lost 3.8 percent so far this year. The US stock exchanges were hit harder: the standard S&P 500 index fell more than 7 percent, and the Nasdaq 100 technology index even more than 12 percent. For classification: Since the beginning of 2019, the Dax has increased by almost 50 percent, the S&P 500 by almost 80 percent. The Nasdaq 100 even rose by more than 130 percent in the three years.
The business talk “How safe is our money?” will be broadcast today at 11:15 p.m. on ntv and can also be seen in the stream on RTL+.