The Euribor flies to its highest levels of the year amid doubts about interest rates

The 12-month Euribor is on track to sign the second consecutive monthly increase. This week, the daily rate (with which the monthly average is configured each day) has risen to 3.75%, the highest level in 2024.

For its part, the provisional monthly average for March jumps to 3.73%, above the 3.67% in February. January's 3.60% is increasingly further away in a new interest rate scenario that has changed the dynamics by which the mortgage index chained three consecutive declines between November 2023 and January of this year.

The highs of the year come just before it was announced yesterday that the US Federal Reserve maintains interest rates between 5.25% and 5.5%, a record for the last 23 years.

Market forecasts have changed drastically about the future of the price of money in the world's leading economy.

Operators are now playing with the trick of three quarter-point interest rate cuts in 2024, compared to the expectation of six or even seven at the beginning of the year.

At the same time, uncertainty is growing about when the first rate cuts will be activated in the euro zone.

The president of the European Central Bank (ECB), Christine Lagarde, assured yesterday at an event held in Frankfurt that even after the first rate cut, the institution will not commit to adopting a specific roadmap.

Therefore, although the market continues to bet that the first cut of 25 basis points will arrive next June, the thesis that the cycle of declines could be punctuated by pauses is gaining more and more strength.

Amid growing doubts about the short and medium-term evolution of interest rates (just a month ago the market was betting on the start of cuts in April), the Euribor continues to break the expectations of analysts, who when the year began were betting due to a gradual drop in the Euribor to levels of 3%.

In fact, the provisional monthly average for March is already above last year's closing levels, of 3.679%.

Therefore, the expectations of the holders of four million variable rate mortgages, whose interest is reviewed annually, are being disappointed.

In this case, the reference rate is that of March 2023, when the 12-month Euribor was 3.64%.

At that time, the mortgage index was immersed in the great climb that would culminate in October at the 2023 highs of 4.16%.

The other side of the coin is that loans whose interest rates are reviewed semiannually will see the cost alleviated, since in September of last year the Euribor stood at 4.14%.