London, Thursday, 24 March 2022
In anticipation of a looming policy tightening cycle, the global bond market rout continued. Inflation, which is currently at record highs in Europe and 40-year highs in the United States, was the focus of major central banks.
Surprisingly hawkish statements by Fed Chair Powell and his rate-setting colleagues exacerbated market movements this week, leading markets to gamble on a larger possibility of the Fed raising rates by 50 basis points rather than 25 basis points in May.
The 10-year US Treasury yield, which sets the global benchmark for corporate and family borrowing costs, soared above 2.36 percent, closing in on its highest level since May 2019.
The difference between five-year and 30-year yields has shrunk to its narrowest level in 15 years.
The benchmark for Europe, Germany's 10-year Bund yield, increased to 0.54 percent, the highest since October 2018, while French 10-year yields surpassed 1% for the first time since 2018.
Source: U.S. Department of the Treasury // (Edited by: The Decision Maker)