Markets under the spell of US trade policy
Interest Rate Outlook , 28. Mai
Capital market participants expect further interest rate cuts in both the Eurozone and the US this year. We expect two interest rate cuts of 0.25% each by the US Federal Reserve and one interest rate cut by the ECB. As in the US, the Eurozone economy can also tolerate a less restrictive monetary policy, as the new US tariff regime will take its toll on the economy. As always, in this interest rate outlook, we present our expectations for both central banks, the ECB and the US Fed, as well as for the respective government bond markets. We also focus on the economic policy issue of government debt.