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Eddy's Weekly Market Insight

Monday, 18 August 2025

Eddy's Weekly Market Insight

US interest rates lower, European rates down more than expected

The U.S. stock market is in a sort of euphoric state due to expectations that the Federal Reserve will soon make significant interest rate cuts. There is also an assumption that the ECB will continue cutting rates, albeit far less aggressively than the Fed. What’s striking is that stocks are reacting so positively, even though in the past they sometimes fell sharply when interest rates dropped. The reality is more complex.

Edward Markus, Founder & Chief Economist

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