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Interest Rates Outlook

Risk of policy mistake increases

Monday, 13 May 2024, written by Maarten Spek

Before starting a rate cutting cycle, the ECB and the Fed first want assurances that inflation has resumed the downward trend. This increases risks of a policy mistake by both central banks…

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Previous reports

Data dependent

Monday, 29 April 2024

Structural factors continue to exert more upward pressure on inflation compared to the years before the corona crisis. This complicates the work of central banks. Can they lower interest rates substantially in this climate?

Inflation rates posing obstacle to Fed rate cuts

Monday, 15 April 2024

The increasing upward pressure on inflation pushes the expectation of interest rate cuts by the Fed further and further back, reinforcing the upward pressure on long-term interest rates. The further long-term interest rates rise, the tighter financial conditions become and the greater the risk of a risk-off phase that could eventually lead to a sharp decline in interest rates.

Recovery in goods sector increases upside potential for interest rates

Tuesday, 02 April 2024

Rising oil prices, an improving outlook for the goods producing sector and speculation of a higher inflation target for the Fed increase the short-term upside potential for long-term interest rates, but do not change our expectation of falling long-term rates later this year....

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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