Rate-Cut Bets

🧭 Background & Context Bets on interest rate cuts are currently marked by excessive optimism. Markets are pricing in rapid and aggressive easing, even though underlying inflation remains stubbornly above target. This discrepancy between market expectations and central bank communication creates a fragile starting point. A calm assessment shows that the interest rate turnaround will likely be a gradual process, not an abrupt event. The high volatility in bond markets reflects precisely this uncertainty. Investors should therefore focus not on the timing, but on the direction of monetary policy. 📊 Market Environment & Drivers The main drivers are structural and cyclical in nature: On one hand, global supply chains are shifting toward regional production clusters, reweighting cost and resilience advantages. On the other hand, regulatory requirements for decarbonization are forcing a massive transformation of energy-intensive industries, with the price of CO₂ certificates becoming the central steering instrument. Added to this is the technological leap in AI-driven automation, which relativizes labor costs and shifts location decisions in favor of innovation ecosystems. Demographic change in core markets intensifies the skill …