Investors believe loans are becoming cheaper primarily because central banks, such as the Federal Reserve and the Bank of England, have entered a cycle of interest rate reductions that is expected to continue through 2026. "Central Bank Rate Cuts: Central banks have already begun lowering their "base" or "benchmark" rates as inflation eases toward 2% targets. For example, the Bank of England recently cut its base rate to 3.75% in December 2025, with further cuts signaled for 2026".

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