The ECB should not stop raising interest rates until it is clear that inflation has “hit a ceiling”, Bank of France chief Francois Villeroy de Galhau said
Stabilizing trends prevailed in bond markets today as investors try to gauge the European Central Bank’s intentions regarding what it has set the “bar” for rate hikes. interest rates.
Today the head of the Central Bank of France Francois Villeroy de Galhau stated that we are not far from reaching the so-called neutral level of interest rates. However, he stressed that the ECB should not stop raising interest rates until it becomes clear that inflation has “hit a ceiling”. Analysts estimate that inflation will continue its upward path to peak at the first in the first quarter of 2023.
It is recalled that so far the ECB has raised its interest rates by 2%, at a rate unprecedented in its history. Thus, its base interest rate now fluctuates at 1.5%, but futures markets predict that within a year it will have reached 3%.
In the secondary bond market and specifically in HDAT limited investment interest was observed as transactions of only 6 million euros were recorded. The yield on the 10-year bond rose to 4.74% from 4.70% versus 2.32% for the corresponding German bond, bringing the spread to 2.42% from 2.47% at the end of last week.
In the foreign exchange market, the euro strengthened against the dollar, trading at $0.9996 in the early afternoon from the $0.9898 level that opened the market. The indicative euro/dollar exchange rate announced by the European Central Bank was 0.9874 dollars.
RES-EMP
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