Our View - The Questions

"Inflation worries are on the rise"

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The topic of inflation is preoccupying markets and monetary policy makers, says VP Bank CIO Felix Brill in an interview.

Especially the US central bank, the Federal Reserve (Fed), takes the inflation seriously. Why? "Because we are now seeing wages rise in the US and there are increasing concerns that a wage-price spiral is getting underway," says Brill in the video format "Our View - The Questions".

That's what the Fed wants to prevent. "It looks like the Fed will end its bond purchases in March and raise the key interest rate for the first time." The target range for Fed Funds Rate would be raised to 0.25% to 0.5%.

Yields on government bonds have already risen, and in Switzerland those on the 10-year made it just above zero once again. "The flip-side is falling bond prices, and therefore government bonds are not attractive in this environment," says Brill.

Find out in the latest video what the new interest rate environment means for equities, especially tech stocks.

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