Citadel Securities predicts the market is misjudging the US and European interest rate paths, and the European Central Bank is unlikely to persist with rate hikes

As the Middle East conflict pushed crude oil prices above $100 per barrel on Monday, interest rate swaps show that traders have fully priced in at least a 25 basis point rate hike by the European Central Bank before December, and are leaning towards another increase. Meanwhile, they expect the Federal Reserve to cut rates by a similar magnitude to the European rate hike over the same period. Expand