Focus on the short term

The markets seem to perceive the narrow escape of interest rates

WHAT HAPPENS
Last week we said "the FED and the ECB will decide on rates, but with different perspectives", and so it was. The ECB raised rates by a further 0.25% due to inflation.
But inflation in the Eurozone is showing a marked deceleration, if only because Germany is primarily in a recession, now confirmed by two consecutive negative quarters.
In the history of thought and practice of economic policy, a recession has always been responded to with stimulus measures, i.e. lower rates and lower taxes. But the ECB has something else in mind: it is using rates to create widespread crises in the system so as to make extraordinary interventions and institutions such as the MES and TLTRO-type programs necessary. It now seems like a foreign body completely disconnected from the real economy. Thus the Eurozone is doomed to “unhappy degrowth”.

WHAT TO EXPECT
It is probable that in the short term we will see the further advance of stock indexes, above all Americans, due to the narrow escape from interest rates; but, let's remember, this happened above all because of the Artificial Intelligence sector. The Eurozone, for strength, will have the Euro but it is not good news for the real economy so much so that since March the Stoxx50 has underperformed the S&P500 by almost 8%.
How much longer shares will run will depend above all on the intensity of both the European and American recession. At the moment, a mild recession is expected in Europe, while in America the scenario that would avoid a recession altogether is still credited.
An eye should be kept on precious metals. If gold does not soon violate the low of 1935 achieved in recent days, it could score new absolute highs by July.