-
The plunge in German bond prices is not just an interest rate issue
Yields on German bonds rose to 2.8% this week, the highest in 12 years and a whopping 35% higher since the start of the year. While most of the immediate bond weakness has to do with inflation and interest rates, Germany is also facing other deeper issues around confidence and trade relations. The European Central bank has signalled that it might not raise interest rates again (they are already at an all-time high of 4%) but in light of consumer prices remaining stubbornly high there is a good chance that the bank will keep high rates in place for longer than expected. Like long-Covid, the high rates are doing quiet ... (full story)