ECB Vice President: High Global Bond Yields Not a Stability Threat
Editorial responsibility
- No named human review is recorded for this page.
- Source reporting is collected, normalized, translated or condensed automatically when needed.
- Automatically published source-backed update
On September 18, ECB Vice President Luis de Guindos stated that rising global bond yields to their highest levels since before the financial crisis do not pose a threat to financial stability, as eurozone banks are well-capitalized and have ample liquidity. He attributed market bets on further ECB rate hikes primarily to rising energy prices, but emphasized that policymakers examine a broader range of economic indicators when deciding next steps. De Guindos cautioned that focusing solely on energy prices is not advisable, regardless of their importance. He noted that if inflation remains high throughout the autumn and affects household incomes and consumption behavior, it will also dampen GDP growth. The ECB will observe developments over the coming months and adjust policies accordingly. The rise in global bond yields is attributed to rising inflation and interest rate expectations, as well as massive borrowing needs from governments and technology companies.
Source report
September 18 – European Central Bank (ECB) Vice President Luis de Guindos stated that market expectations for further ECB rate hikes are primarily driven by rising energy prices, but emphasized that policymakers will consider a broader set of economic indicators when determining their next steps.
"The pricing of the interest rate path is mainly driven by rising energy prices," de Guindos said. "I want to emphasize that we do not look solely at energy prices when making monetary policy decisions; instead, we examine a wider range of data and criteria. Focusing only on energy prices is not advisable, no matter how important they may be."
He added that if inflation remains elevated throughout the autumn and affects household incomes and consumption behavior, it would also dampen GDP growth. "We will observe developments over the coming months and adjust our policies accordingly."
Global bond yields have risen to their highest levels since before the financial crisis, driven by rising inflation and interest rate expectations, as well as substantial borrowing needs from governments and technology companies. However, de Guindos noted that these trends do not pose a threat to financial stability, as eurozone banks remain well-capitalized and possess ample liquidity.
Source
domesticNeutral / independent
Part of this Story
ECB officials downplay energy-driven rate path, stress broader economic view