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Subject:

Interest Rates Outlook

Is the inflation risk being underestimated?

Monday, 14 October 2024, written by Maarten Spek

Central banks believe inflation is by and large under control and are focusing more explicitly on stimulating economic growth. This raises the question whether central banks - and markets - are underestimating inflation risks, as several developments could create more upward inflation pressure in the coming quarters. And what does this mean for the interest rate outlook?

This report is published: Bi-weekly

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Previous reports

Steeper yield curve because of China

Monday, 30 September 2024

Easier monetary policy and falling oil prices put downward pressure on long-term interest rates. However, sustained US growth and, more importantly, additional economic stimulus in China put upward pressure on long-term interest rates. Which forces will prevail and what does this mean concretely for short-term and long-term interest rates?
 

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Two scenarios for interest rates

Monday, 16 September 2024

The amount of rate cuts the markets are now pricing in for the ECB and the Fed is a compromise between a scenario of sustained economic growth and one of increasing recession fears. Which scenario is more likely? The answer will largely determine the course of interest rates in the US and Europe.

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Markets are pricing in too many rate cuts

Monday, 02 September 2024

Investors assume that the Fed will cut interest rates by around eight times until the end of next year. However, as long as economic data continue to point to continuing or even strengthening economic growth and US election uncertainty remains high, there is a growing risk that investors will have to discount less rate cuts...
 

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Past Predictions

Readers frequently inquire about the accuracy of our predictions and whether we track them. Naturally, we don't possess a crystal ball, and the primary objective of our analyses is to present our readers with the most probable scenarios in the medium term. However, we do provide specific exchange rate predictions and in general they have been quite accurate. 

Below are our forecasts for US and German 10-year government bonds for the period from January to December 2023.