Year of the Bond Is Finally Coming to Europe, State Street Says
- State Street Global Advisors strategists see ECB rate at 1.5%
- Asset manager says US will levy tariffs on the European Union
This article is for subscribers only.
European bonds are primed to outperform this year because the US will follow through with threatened trade tariffs, forcing the central bank to slash interest rates, according to State Street Global Advisors strategists.
US levies on the European Union will weigh on the region’s export-oriented economy at a time when it’s already experiencing sluggish growth and declining inflation, the firm’s strategists say. That will lead the ECB to cut rates from 2.75% to 1.5%, they add — a steeper reduction than the 1.9% rate priced into the market.