Week in Focus

23 October 2026: Fed and ECB in lockstep

While the ECB and the Fed are unlikely to respond to the high inflation risks with interest rate hikes as early as next week, they are likely to do so in December—provided French government bonds do not suffer a complete collapse. Factors pointing against further interest rate hikes in the new year include the decline in oil prices we anticipate, the dampening effect of higher bond yields, and the assessment by many central bankers that key interest rates will already be having a restrictive effect by then.

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