A wave of demonstrations swept across several European countries and the United States in October 2026, reflecting growing public discontent with economic conditions and government policies. In Europe, protests took place in France, Italy, Belgium, Spain, and Portugal, with demands centered on the high cost of living, low wages, expensive housing, and the quality of public services. Meanwhile, the United States also faced major demonstrations ahead of the midterm elections on November 3. Although the protests in the U.S. were driven largely by political issues and the policies of President Donald Trump’s administration, the pressure of the cost of living remained a significant economic concern for the public.
The core issue linking both regions is the erosion of purchasing power, as the rising prices of essential goods have not been fully offset by income growth. In the European Union, the price of food and non-alcoholic beverages increased by approximately 34% between August 2021 and August 2026. This demonstrates that a slowdown in inflation does not necessarily make life more affordable, as the prices of goods and services remain at relatively high levels. Rising costs for housing, energy, transportation, and daily necessities have further constrained household spending, particularly for those with low to middle incomes.
These economic pressures are exacerbated by global geopolitical uncertainty—most notably the conflict in the Middle East, which threatens to disrupt the global oil supply. Rising energy prices could drive up the costs of producing and distributing goods, creating the risk of persistent inflation. This situation presents a dilemma for central banks, including the Federal Reserve and the European Central Bank, as they determine the direction of their monetary policy. Maintaining high interest rates risks slowing economic growth and increasing the debt burden on the public, while easing policy too quickly could heighten the risk of a resurgence in inflation. The spread of demonstrations in developed nations serves as a warning that economic stability is determined not only by gross domestic product (GDP) growth but also by the ability of the public to meet their basic living needs. If price pressures persist, household consumption could weaken, potentially hindering global economic growth. Investors are expected to monitor developments in inflation, labor markets, and the trajectory of interest rate policies more closely as the year draws to a close. Such conditions could also increase volatility across stock, currency, and commodity markets—particularly if public discontent escalates into broader political instability.
- Rising inflation: The Federal Reserve may keep interest rates high for longer. This tends to support the dollar, while putting pressure on gold.
- Slowing inflation: The Federal Reserve gains more room to lower interest rates. This could weaken the dollar and potentially strengthen gold.
- High inflation combined with a weakening economy: This scenario is more complex, as it introduces the risk of "stagflation"—a macroeconomic condition characterized by stagnant or slowing economic growth, high unemployment, and rising prices (inflation) occurring simultaneously.
While gold may see increased demand as a "safe-haven" asset, high interest rates could simultaneously exert downward pressure on it.
In conclusion: the rising cost of living—driven by broad-based price increases—is indeed linked to inflation. However, the public may continue to face a heavy cost-of-living burden even after inflation rates have begun to decline. (CP)