Report
Patrick Artus

Can we expect a gradual upturn in interest rates in the euro zone?

A slow and gradual rise in euro-zone long-term interest rates would be positive: It would give borrowers the time to adjust their debt level; I t would give lenders and financial intermediaries a gradual rise in the yield on their assets, without giving rise to significant capital losses on bond portfolios. But is it possible to seriously imagine a gradual rise in long-term interest rates in the euro zone? A first problem is that if inflation and growth are low, the ECB does not want to start this move of a slow hike in interest rates; A second problem is that a long period of "economic tranquillity " would be needed, without a shock, for such a slow and steady rise in interest rates to occur; A third problem is that there is a risk of an upsurge in inflation (due to a change in labour market rules or an oil crisis) that would lead to an upsurge and not a gradual rise in interest rates.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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