GKB expects interest rates to stay elevated as inflation persists
TLT•GKB expects the Federal Reserve and European Central Bank to hold rates steady this week, while inflation of around 3% to 4% in many regions could keep rates elevated or prompt modest increases in coming months.
1. Inflation and rate outlook
GKB expects the Federal Reserve to hold interest rates steady Wednesday, followed by the European Central Bank on Thursday. Inflation remains around 3% to 4% in many regions, potentially keeping rates elevated or prompting modest increases in coming months.
2. Risks and market context
GKB said geopolitical tensions could raise energy and goods prices, delay disinflation and increase financial market volatility. Switzerland’s lower inflation gives its central bank more flexibility, though higher US or eurozone rates also influence Swiss bond yields. Robust growth and solid corporate earnings continue to support equities, while inflation and geopolitical risks reinforce the importance of diversification.
