Risk of US Credit Cycle Overheating Underpriced, Deutsche Bank Says
- Higher rates could bring ‘substantial’ rate volatility
- Much lower inflows could be ‘big surprise’ for IG debt in 2025
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Stronger US growth, higher inflation and higher interest rates under President-elect Donald Trump could lead to a “substantial” dose of rate volatility, damage a supportive credit technical backdrop and eat into returns, according to Deutsche Bank AG analysts.
The outlook for financial and geopolitical world is now far from “business as usual” following Trump’s election victory and the Republican sweep in Congress, opening up a wider range of outcomes for financial markets, analysts including Jim Reid and David Folkerts-Landau wrote in a note Monday.