Don’t Expect a Meaningful Fiscal Push From Germany

The German economy needs new sources of growth. Investors shouldn’t count on fiscal stimulus to be one of them, even if the government loosens the purse strings a bit.

On Monday, the Bundesbank said that Germany’s economy could shrink between July and September for the second quarter in a row, officially plunging Europe’s powerhouse into a recession. Expectations that the European Central Bank will need to slash interest rates further have driven yields on 10-year German government bonds down to around minus 0.7%.

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