Transatlantic spread – from monetary signal to fiscal mirror

2026

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This report analyzes the evolving transatlantic spread, moving beyond monetary policy to incorporate fiscal credibility and sovereign liquidity as key drivers.

* Examines the historical range and recent narrowing of the US Treasury-Eurozone German Bund spread.
* Deconstructs the spread into rate expectations, term premium, and OIS spread components.
* Projects a widening of the spread driven by diverging neutral rates, QT pace, and liquidity dynamics.

Tags: Transatlantic spread, US Treasury, German Bund, term premium, fiscal credibility

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