Higher bond yields makes an ECB pause more likely

Lower inflation and tighter financing conditions reinforce idea 4% rates could be enough

Pablo Hernández de Cos
Bank of Spain governor Pablo Hernández de Cos
Photo: Banco de España

Higher bond yields among eurozone economies makes increasingly likely that the European Central Bank will maintain interest rates unchanged over the next months.

Over the last few weeks, sovereign bond yields have rapidly increased in the US and western economies. Some observers have pointed out this is because investors are finally catching up with the fact interest rates will remain higher and for longer than they previously expected.

The US federal funds rate stands now at 5.25–5.5%, while

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