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CHRONIC. Investors and market operators anticipate a probable recession in Europe and the United States. However, several factors can make you optimistic.
By Patrick Artus* Investors and market operators anticipate a major downturn in activity, probably a recession, in the United States and the euro zone. © KIRILL KUDRYAVTSEV / AFP Published on 01/07/2023 at 09:00
When we look at inflation and short-term interest rate expectations (central bank key rates), we see that the financial markets are anticipating a fairly sharp slowdown in the economy. The Fed Funds interest rate (the Federal Reserve’s key interest rate) is also expected to drop from 5.25% today to 3.5% at the end of 2024; the ECB’s repo rate (its key interest rate) is expected to rise to 4.25% and then fall back to 3.25% at the end of 2024.
As for expected inflation measured on the financial markets, it is below 2.5% in the United States and the euro zone at the end of 2024. All these developments show that investors and market operators are anticipating a reversal important to lower the…
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2023-07-01 07:00:00
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