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2023/09/04 / Erste Group Research

Eurozone and US: What comes after the interest rate hikes?

After more than a year of sharply rising interest rates, the results differ. This is not least because interest rates were not the only thing on the move. The war in Ukraine triggered a massive rise in energy prices in Europe, from which the US was largely spared. The US economy, on the other hand, continued to benefit from generous public spending support during and after the pandemic. All in all, this resulted in weak economic activity in the Eurozone, while GDP growth in the US has so far suffered little damage. In terms of inflation outside energy and food (core inflation), there are signs of a slowdown in both economic areas, which are more convincing in the US than in the Eurozone.

All in all, this should mean that key interest rates in both economic areas will not rise any further, or at most only slightly. However, the stabilization of key rates does not mean the stabilization of economic data. We expect inflation to fall further. That said, for all the imponderables of inflation forecasts, these are still the easier part of the outlook. Major uncertainty comes from the economy.

The crises of recent years have led to a shortage of both goods and labor. In contrast to the shortage of goods, the shortage of labor will not end when the crises abate; on the contrary, it is likely to increase in the coming years. This is supported by demographic trends. We have therefore looked at what will determine how scarce labor will actually be in the future and what the effects could be, and written a special section on this.

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General information

AuthorErste Group Research
Product nameInterest Rate Outlook Eurozone, USA
Topic in focusMacro/ Fixed income
Economy in focusEurozone, United States
Currency in focusEuro, US Dollar
Sector in focus-


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