The Week in Markets - US rates in focus - higher for longer

The Beyond Markets podcast channel is wrapping up on a high note at the end of 2025. But do not worry! The conversation continues on our podcast Moving Markets by Julius Baer, where we'll be sharing fresh insights and analysis on current market developments.

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In this episode, we discuss the rates development in the US and Europe, and the different policy paths that both central banks are likely to take despite weakening consumer sentiments. In Europe, the indicators point to the ECB keeping a Hold in rates owing to very weak sentiment and as credit lending in Europe remains low. In the US, treasury yields jumped after the government shutdown is averted with the focus back on rates. We take stock of weakening consumer sentiment yet solid investment demand and unsustainable fiscal stance. We discuss what’s on the radar that could move US rates this week, which is labor market inputs. Basically, investors would like to see wage data that shows wage growth numbers rolling over while the Federal Reserve would like to avoid a situation where wage spiral is resurfacing again. In a nutshell, higher rates for longer mean a stronger USD against other major currencies.

This episode is presented by Magdalene Teo (Head of Fixed Income Research, Asia)