Interest Rates Outlook

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?

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?
 

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.