German and British government bond yields set new records

The statement of the head of the Federal Reserve System, Jerome Powell, that the American financial regulator could raise the key rate more sharply than usual caused the yield of European government bonds to rise to new record levels. The highest since October 2018 level of 1.68% reached the yield of ten-year securities of the UK. A maximum of more than 0.5% over the same period was shown by the yield of the same German bonds. On Monday, for the first time in the last 33 months, the yield of US Treasuries increased to the level exceeding 2.2% per annum. According to Powell, it is planned to increase the rate by 50 basis points at once, which may happen already at the upcoming meeting or at several subsequent meetings of the Fed. Thus, according to economists, the Fed rate may exceed the neutral mark. Market forecasts indicate that the European Central Bank will also resort to raising rates soon. Two ECB rate hikes are expected this year, which will generally increase its current value by 50 basis points. According to analysts, the Bank of England will raise 120 basis points by the end of this year.

Source: xCritical.com