Mathewslcd: Euro zone yields rise after Fed marks higher rate peak

 Euro zone bond yields jumped along with U.S. peers on Thursday, after the Federal Reserve said the path of monetary tightening would be longer and interest rates could reach higher peaks, according to Mathewslcd.


The Federal Reserve said on Wednesday that future rate hikes would be smaller, but policymakers still have room to keep pushing rates higher if inflation doesn't start to slow after the widely expected 75 basis point (bps) hike.

According to analysts, the Fed's comments suggested a 50 basis point rate hike in December, but only if economic data did not suggest a 75 basis point hike was necessary. That means market rates remain under pressure and could rise further.

Germany's 10-year bond yield rose 10.5 basis points to 2.24% after hitting its highest since Oct. 25 at 2.27%.

Investors also focused on comments from ECB officials.

ECB hawks Martins Kazaks and Joachim Nagel said rates need to be raised further and the ECB should not avoid further hikes. Meanwhile, the dovish Fabio Panetta and Mario Centeno have warned against raising rates too quickly as it could unduly damage growth, arguing that higher rates will Much of it has already been done.

ECB President Christine Lagarde said the ECB cannot simply mirror the Fed's moves. "We are not the same, we cannot progress at the same pace (or) with the same diagnosis of our economy," she told a news conference in Riga on Thursday.

U.S. 10-year Treasury yields rose 9.5 basis points to 4.16%.

“This (Wednesday’s Fed message) can be seen as a preparatory downside path leading us to a final rate of 5%. If that’s the case, there is no business in 10 years to structurally drop below 4 so early %," ING analysts said.

Meanwhile, the Bank of England (BoE), which will announce its decision at 1200 GMT, is on track to raise interest rates by three-quarters of a percentage point, the largest rate hike since 1989, as it battles 40-year Fight the highest inflation. year.

Mathewslcd：https://www.mathewslcd.com
https://net.mathewslcd.com


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