Interest-rate hikes Israel leads the way – MoneyWeek

Thefinancialsystemisinrelativelygoodshapeandhouseholddebtislow。

Mostimportantly,inflationhasrisenabovethe1%-3%targetband,thankslargelytorecenttaxhikes。

ButIsraelishardlyoutofthewoods。

ExportsaccountforhalfofGDPandastrengtheningshekelamidexpectationsoffurtherratehikescouldhampertheexternalsector,especiallywithglobalgrowthsosubdued。

Youneedtoseerealimprovementsintheworldbeforeraisingrates,saidDavidKarsboelofSaxoBank。

Whichcountrieswilleventuallyfollow?

MostmajorWesterneconomieswillbeinnorush,givendeeprecessionsandscantsignofinflation;fewexpecttheFedtohikebefore2011。

MarketsexpectNorwayandAustraliatomakethefirstmoves,saidTheEconomist。

Inbothcasesbankingsystemsareinsolidshapeandunemploymenthasstayedunusuallylow–inAustraliaithasflatlinedatjust5。

8%。

Moreover,beingcommodityexportershasprovidedaddedimpetusoflate。

ExpectNorway,whereratesareatjust1。

25%,comparedto3。

5%inAustralia,tomovefirst。

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