German 10-year bond yield turns positive for first time since 2019
Yields on German 10-year government bonds briefly surfaced into positive territory Wednesday morning. They haven't been positive since 2019.
Why it matters: R.I.P., ZIRP.
- Rising rates on the German bund reflect how central banks are now backing off on the help — essentially super-low interest rates — they used to cushion their economies during the pandemic.
The big picture: As in the U.S., inflation is rising in the eurozone, where prices are up 5% over last year, a record high in the relatively brief history of the monetary bloc.
What’s next: While the rise in rates didn’t stick yesterday — the yield on the 10-year bund went negative again — the trend suggests investors are betting that the European Central Bank will try to start fighting inflation with tighter monetary policy sometime later this year.
- But ECB president Christine Lagarde rejected calls to move as fast as the U.S. today, saying it had "every reason not to act as quickly or as ruthlessly."