Report
Why do financial market participants systematically underestimate future interest rates?
We look at the situation of the euro zone. Since 2022, short-term and long-term interest rate expectations have systematically underestimated the level that interest rates would actually reach. This is happening again today when we look at market expectations for interest rates in 2024 and the interest rates that are likely to materialise. Why do financial markets continually misjudge future interest rates? Financial market participants probably do not want to change paradigm; they refuse to accept the idea that inflation will be structurally higher than in the past and that interest rates will therefore also be higher.
Provider
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.
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