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Interest Rates Outlook

More signs of weakening growth

Monday, 08 July 2024, written by Maarten Spek

Following the debate between Trump and Biden, long-term interest rates rose although incoming data continue to point to downward pressure on inflation and economic growth. What is the reason for this and what does it say about the medium-term outlook for longer-term interest rates?

This report is published: Bi-weekly

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Previous reports

The costs and benefits of adopting a wait-and-see stance

Tuesday, 25 June 2024

The Fed and the ECB have good reasons to wait to cut interest rates (further) until inflation clearly declines again. But the longer central banks wait to cut interest rates, the greater the risk of a policy error becomes. Such a policy mistake must then be repaired by sharp interest rate cuts, which will eventually lead to higher long-term interest rates and a steep yield curve.

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A great deal of movement, little direction

Monday, 10 June 2024

Fickle data on the U.S. economy and labor market and increasing political uncertainty have caused wide fluctuations in U.S. and European long-term interest rates, but on balance the market is moving sideways. However, we expect the latter to change...

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Short-term interest rates are slowing the economy less, long-term interest rates have less downside potential

Monday, 27 May 2024

We expect less declines in U.S. and European long-term interest rates in the coming quarters than we have indicated in previous interest rate reports. However, we do continue to expect the ECB and Fed to cut interest rates several times in the coming quarters as a result of more downward pressure on inflation....


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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.

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