What Do Rock-Bottom Rates Mean for Investors in Europe?

Eurozone interest rates are now expected to stay lower for longer as the economy and inflation slows, but markets have so far been resilient this year

James Gard 7 June, 2019 | 11:37AM

European Central Bank

When European Central Bank President Mario Draghi said in September 2018 that its quantitative easing programme would be ending in 2019, stock and bond markets took that as a sign that the eurozone economy was getting back to normal.

After all, European equities had performed well in 2017 and 2018 amid optimism that the 19 countries of the currency bloc were finally coming out of the malaise suffered since the financial and Greek debt crises. The Federal Reserve raised rates four times in 2018, so the ECB was simply (belatedly) joining in the move towards tighter monetary policy.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Threadneedle European Sel Z Acc GBP1.89 GBP-2.67

About Author

James Gard  is content editor for Morningstar.co.uk

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