Descriptive versus Normative Perception

Good Morning Ladies and Gentlemen

“I had great anxiety and no means of relieving it.”

by Sir Winston Leonard Spencer-Churchill

Descriptive perception

Descriptive perception is thought to mean understanding how the individual, society, or world actually is.

European Central Bank (ECB) I

Despite a faster decline in inflation, the European Central Bank is waiting to cut interest rates for the first time since summer 2022. Yesterday, the ECB Governing Council left the key interest rates in the 20-country currency area unchanged for the fourth time in a row. The most important interest rate for supplying the banking industry with fresh central bank money remains at 4.5%. The deposit rate, which banks receive for parked money, remains at 4.0%.

Normative perception

Normative perception is thought to mean understanding how an individual, society, and the world should be.

European Central Bank (ECB) II

Central Bank president Christine Lagarde indicated yesterday in Frankfurt after the ECB Governing Council meeting that a change of course could occur at the June 6 meeting. She clarified: “We did not discuss a rate cut in this meeting. We have just started discussing the withdrawal of our restrictive stance.”

Reason

The recent development of the inflation rate makes the euro currency guardians more confident but “not sufficiently confident,” explained Lagarde. We clearly need more evidence and more data. We will know a little more in April, and we will know a lot more in June.”

Federal Reserve

According to Neel Kashkari, head of the Minneapolis Fed, the US Federal Reserve is only likely to lower interest rates max. twice this year due to stronger economic data since the beginning of the year

Same same

It looks like both central banks are going to lower their key interest rates in summer at the earliest, and it seems this is going to be somewhat orchestrated between them.

Impact

The impact will probably be that risk assets like equities, gold, and cryptos continue to perform well as the interest rate fantasy remains alive. We will see soon enough, in three months from now we are going to be in summer. Time flies, Ladies and Gentlemen.

Year-End competition

Next week, I will give an update on the state of this year’s year-end competition. We will look at the guessed price ranges in the different asset classes and share some information about the Incrementum partners’ guesses. If you have not participated so far and still want to, please feel free to send in your bets.

Ladies and Gentlemen

As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li

Many thanks, indeed!

I wish you an excellent start to the day and the weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li