Developed market central banks continue to fight inflation, but are at different points in tightening monetary policy. The Federal Reserve and Bank of England may be nearing the end of hiking regimes, while the European Central Bank may be somewhat slower to end tightening, according to Bloomberg Intelligence Interest Rate Strategists.
In this Macro Matters edition of the FICC Focus Podcast, Bloomberg Intelligence Chief US Interest Rate Strategist Ira Jersey is joined by Huw Worthington, BI's European Interest Rate Strategist. Worthington reviews his views on how much further the ECB and BoE may increase rates and the affect that may have on government bond yields. He also discusses the different ways central bank balance sheet runoff may increase net issuance of debt - which creates risk for some countries. Italy in particular is a worry for the London based Worthington, with the ECB potentially needing to intervene if spreads widen. The possibility of the Bank of Japan eliminating yield curve control is also discussed.
In a new segment of the podcast, “Interest Rate Intro,” US Interest Rate Associate Strategist Will Hoffman asks Jersey about the interaction of central bank Treasury purchases and market pricing.