A long goodbye to NIRPs and ZIRPs

Thanks largely to central-bank intervention, the list of zero- and negative-yielding eurozone bonds is a long one.

But we think that’s about to change. For one thing, we’re predicting steady economic growth and a consequent uptick in inflation. In response, central banks – the European Central Bank among them – will likely not only raise interest rates but also begin to wind in their quantitative easing programmes.

While we can point to a lot of complacency in the market right now, we do think attitudes are going to shift at some point – and when they do, core European income will begin to face headwinds. We might not be at the end of negative yields just yet – but certainly we think we’re at the end of the beginning.

Brendan Murphy – Standish, a BNY Mellon company

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