Global bonds rallied on Friday as renewed concern over the banking sector spurred demand for safe assets and fueled bets central banks won’t be able to keep raising rates for long.
(Bloomberg) Economists at Morgan Stanley raised their forecast for the European Central Bank’s key interest rate to 4% because core inflation is likely to peak later and higher than previously expected. 
The European Central Bank predicts wage growth a key indicator of where inflation is headed will be “very strong” in the coming quarters, strengthening the case for more interest-rate hikes.
The European Central Bank increased interest rates at a slower pace but said they must still rise “significantly” as it widened efforts to subdue inflation with a decision to shrink its €5 trillion ($5.3 trillion) bond portfolio.