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2024/01/15 / Erste Group Research

Eurozone, USA: When will interest rates fall?

The interest rate markets are facing an unusual challenge. A cycle of interest rate cuts is emerging in both the USA and the eurozone that was not triggered by a crisis. This has not been the case for decades. This makes it more difficult to determine the timing and extent of interest rate cuts. The data does not point clearly in one direction. Falling inflation in both economic areas was offset by a still robust labor market and a solid economy in the USA. In this environment, even relatively small changes in economic data led to sharp swings on the bond markets. Yields initially rose sharply from the summer onwards, only to fall from the end of October, often even below the starting level of the summer.

So far, the market has reacted to this environment with extremely strong fluctuations. Last year, the mantra "higher for longer" was quickly followed by expectations of massive interest rate cuts. The question is whether the markets have learned or not. As always, our Interest Rate Outlook contains our assessments for the interest rate markets in the eurozone and the USA. We have also estimated the additional interest rate burden in the eurozone by sector this year and analyzed debt levels.

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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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