AFMC - Could ECB Rate Cuts Beat The Fed To The Punch?

2024-03-12 10:12:00 ET

Summary

• As inflation continues to ease across the developed world, markets are eager for the rate-cutting cycle to begin.
• The US economy - particularly labor markets - remains strong, prompting concerns that US inflation won’t fall as fast as expected and that the Fed may delay its first cut, perhaps for some time.
• While euro-denominated bond prices will likely rise, investors should take care that currency losses from a weakening euro don’t offset their price gains.

By Sandra Rhouma & John Taylor

Although markets expect both the Fed and the ECB to cut rates in June, macro developments could change that forecast. ...

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