The end of German ordoliberalism?

The week was marked by a historic turning point for Germany, which plans to invest massively in defence and infrastructure, breaking with its reluctance to increase government debt. This announcement led to a repricing of the term premium, with the yield on the 10-year Bund rising by 40 bp. At the same time, the euro has appreciated against the other major currencies, while European equity markets outperformed the US. As a result, investors have revised their growth forecasts for the euro zone upwards. This change of course in fiscal policy could have significant implications for the European economy in the years to come. In the United States, the Trump administration once again kept the markets on their toes with the temporary suspension of military aid to Ukraine, military intelligence assistance and the introduction of 25% tariffs on Canada and Mexico, with exceptions.