Regarding Holtzmann and the euro rate curve, similar to the US, I don't think it is a proper reading that the market is anticipating 6 cuts. I think a better way to consider it is that there is a probability of 0 or 1 cut and a much lower probability of 300bps or more of cuts if Europe falls into a sharp recession. it just looks like this smooth curve of one cut per meeting, but that makes no sense. the same is true in the US I believe. I would argue the least likely outcome is 6 cuts. either one or none, if the economy continues to perform reasonably well, or 6 50bp or 75bp cuts if we fall into recession.
Regarding Holtzmann and the euro rate curve, similar to the US, I don't think it is a proper reading that the market is anticipating 6 cuts. I think a better way to consider it is that there is a probability of 0 or 1 cut and a much lower probability of 300bps or more of cuts if Europe falls into a sharp recession. it just looks like this smooth curve of one cut per meeting, but that makes no sense. the same is true in the US I believe. I would argue the least likely outcome is 6 cuts. either one or none, if the economy continues to perform reasonably well, or 6 50bp or 75bp cuts if we fall into recession.