ECB Rate-Cut Bets Are ‘Stretched’ Compared With Fed, BofA Says
- Traders pare bets on Fed cuts while ECB wagers are unchanged
- BofA sees Fed easing by 50bps more than ECB within next year
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Bank of America is bracing for a repricing in European bond markets as traders realize policy makers won’t cut interest rates by as much as they expect.
Analysts at the bank say markets have scaled back expectations for rate cuts in the US, but not in the euro area, even as policy makers on both sides of the Atlantic point to rates remaining higher for longer.