{"id":20587,"date":"2024-03-01T11:30:39","date_gmt":"2024-03-01T10:30:39","guid":{"rendered":"https:\/\/latribune.lazardfreresgestion.fr\/?p=20587"},"modified":"2024-03-01T11:30:39","modified_gmt":"2024-03-01T10:30:39","slug":"rate-cut-expectations-have-adjusted-sharply","status":"publish","type":"post","link":"https:\/\/latribune.lazardfreresgestion.fr\/en\/rate-cut-expectations-have-adjusted-sharply\/","title":{"rendered":"Rate cut expectations have adjusted sharply"},"content":{"rendered":"

Chart of the Week<\/h2>\n

Since the start of the year, market rates have risen across all maturities following a fall at the end of 2023. Why? Because markets have sharply adjusted their central bank rate cut expectations. While the consensus at the end of 2023 was for six Fed rate cuts and seven ECB rate cuts in 2024, current expectations are nearer to three rate cuts each.<\/p>\n

\"\"<\/p>\n

OUR <\/b>ANALYSIS<\/b><\/h3>\n

At the end of 2023, the market jumped ahead of itself on rate-cut optimism. The reaction was fuelled by inflation figures indicating that disinflation had begun, and Fed Chair Powell\u2019s dovish messaging being interpreted as the green light for a Fed rate cut in March. Since then, central banks have managed to talk down expectations by insisting that it is still too soon to declare victory over inflation. Rates have risen across the entire yield curve, at both the short and long ends.<\/p>\n

Although rising interest rates have weighed on bond markets since the start of the year, carry has provided a cushion to absorb some of the impact. Meanwhile, spreads on high yield and subordinated issuance narrowed, with high yield remaining on the uptrend that emerged in 2023.<\/p>\n

For money market assets, the current backdrop is good news: market consensus sees the segment\u2019s attractive returns \u2013 around 4% in the eurozone \u2013 lasting until the middle of this year.<\/p>\n

***<\/p>\n

Written on March 01, 2024. This is not an investment advice. Opinions subject to change.<\/p>\n

See also: https:\/\/latribune.lazardfreresgestion.fr\/en\/eurozone-inflation-remains-lofty\/<\/a><\/p>\n

***<\/p>\n

This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Fr\u00e8res Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Fr\u00e8res Gestion SAS. LAZARD FRERES GESTION \u2013 a simplified joint stock company with share capital of \u20ac14,487,500 \u2013 Paris Trade and Companies Registry No. 352 213 599. 25, RUE DE COURCELLES \u2013 75008 PARIS, FRANCE<\/p>\n","protected":false},"excerpt":{"rendered":"

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