According to figures published every day by the Agence France Trésor, which manages France's public debt, the rate on 10-year government bonds (OATs) reached 3.59% on December 11, after 3.61% the day before, the day after the National Assembly adopted the Social Security financing bill. This was the highest level in recent years and 0.3% higher than the rate observed at the beginning of the month. Does this market evolution reflect an increased mistrust of the French economy, when one could have legitimately hoped the opposite after the success achieved by the government?

Certainly not, since the main economies of the euro zone have been confronted with the same situation. The gap with Germany has even narrowed to 70 basis points and France is borrowing at almost the same rate as Italy, which has become a kind of reference. Rome has managed to significantly reduce its public deficit in three years to around 3% of GDP, although its debt ratio is still well above 120%. The increase has affected all European rates.

This surprising development is linked to a rumour that the European Central Bank, after its end-of-year meeting during which it is expected to keep rates unchanged, could hint that it will raise them in 2026, under the pretext that inflation in the euro zone has still not reached the target set out in its mandate, namely a level below but close to 2%. This rumour was supported by Christine Lagarde's statements suggesting that the ECB could raise its growth forecasts for 2026 at its next meeting.

The situation is exactly the opposite in the United States. The Federal Reserve cut rates for the third time since September 2024 at its last meeting and brought them back to the 3.50-3.75% range, the lowest level in three years. However, inflation remains well above 2%, as has growth since the beginning of the year. In Europe, even if it recovers slightly in 2026, it will have a very difficult time reaching 1%.

Monetary policy on both sides of the Atlantic is therefore radically different. We would be ready to cut rates with inflation and growth above 2% in Washington and we would consider, at least this is what the markets think, raising them in Frankfurt while the growth and inflation expected for next year are below 1% and 2%. The consequences on the foreign exchange markets were not long in coming. While the fall in the dollar observed with the arrival of Donald Trump had eased in recent weeks, the trend has just suddenly reversed to rebound and approach $1.18 to the euro, close to the low reached at the beginning of the year.

These announcements, as well as the comments of financial analysts, suggest that these developments are likely to increase in the coming months. We would then see a further fall in the dollar. In addition to the consequences of the introduction of customs duties on European products in the United States, this would slow down their exports, in accordance with the American president's clearly stated wishes.

Europe is therefore likely to be doubly penalised, while several major economies are experiencing insufficient growth or even stagnation. The positive contribution of foreign trade, even if it would benefit from the fall in the prices of raw materials, which are quoted in dollars, would be further reduced. Rising interest rates would hurt both investment and consumption as households would find an additional reason to increase their financial savings, which are already at record levels.

In the past, as at the end of 1987, central banks have made different choices without coordinating their actions but explaining that they were responding to different situations. Today, there is no justification for lowering US rates, except for the political pressures that are being exerted on the eve of the appointment of the next chairman of the Federal Reserve. Growth is already being stimulated by fiscal policy and inflation remains above 2%. Similarly, while inflation is very close to 2% in the European Union, growth is very weak and the effects on the foreign exchange market of a rate hike would penalise activity, there is no justification for it when it is envisaged. Such a divergence between the choices of the world's two largest central banks cannot remain without consequences.

The world has changed. The financial markets are reacting quickly. The causes of inflation are no longer the same. It is time for monetary policy to take these new realities into account and for central banks to adapt and coordinate their actions better. Otherwise, there will only be losers.