When U.S. interest rates sneeze, Europe catches a cold. Market anxiety about the inflationary impact of the U.S. government’s massive planned spending boost is driving up U.S. Treasury yields and undermining the dollar. That risks stifling Europe’s recovery with a stronger euro and relatively higher real borrowing rates, even though Europe’s fiscal stimulus is dwarfed .
Inflation-adjusted government bond yields are rising and so is pressure on Fed and ECB policymakers to somehow tamp down the increase before it wrecks the economic recovery they have carefully nurtured with enormous amounts of money-printing. Sovereign yields have risen this year as prospects for U.S. fiscal stimulus and the COVID-19 vaccine rollout lifts growth .
Analysis: As bond selloff gets real, policymakers face fresh headache business-standard.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from business-standard.com Daily Mail and Mail on Sunday newspapers.
Column: U S spillover risks stifling Europe and spurring ECB into action reuters.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from reuters.com Daily Mail and Mail on Sunday newspapers.