Forward Curve: 3M EURIBOR (Projected Interest Rate in percent)
The forwardcurve for the 3M EURIBOR indicates a projected rise in interest rates until 2040. However, beyond 2040, the curve suggests a prolonged period of low interest rates. EURIBOR serves as an excellent benchmark for understanding borrowing costs in Europe, as it reflects short-term, unsecured interbank lending of excess funds. This lending typically ranges from one week to one year, with the 3-month EURIBOR being the most liquid and widely used measure. The forward rates currently suggest an increase in borrowing costs, pointing toward a period of higher inflation leading up to 2040. Post-2040, the scenario indicates a prolonged phase of low inflation and low borrowing costs, which may reflect reduced geopolitical risks, declining global debt, or other stabilizing economic factors.
Chart: Blue Gamma; Link: https://app.bluegamma.io/interest-rate-curves/eur?index=3. Date: 7 December, 2024
Disclaimer: The information provided in this post is for informational purposes only and should not be construed as financial advice or a recommendation to take any action. The projections and interpretations are based on current market data and assumptions, which are subject to change. Readers are encouraged to consult with a qualified financial advisor or conduct their own research before making any investment or financial decisions.