More Interest-Rate Hikes are Set to Follow Rise in Bond Yields
Dow Jones
3 hours ago
0528 GMT - The renewed escalation in the Middle East conflict is keeping energy prices high and fueling the global rise in yields, DZ Bank analyst Christian Lenk says in a note. This is likely to warrant monetary-policy tightening. For the European Central Bank, DZ Bank expects a 25-basis-point hike in the fourth quarter, bringing the deposit rate to 2.75%. However, current market pricing for tightening toward 3% and above looks excessive, he says. DZ Bank also thinks the Federal Reserve is likely to deliver a precautionary hike. "But we also consider market expectations in the U.S. to be too hawkish," Lenk says.
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