The Federa Reserve (Fed) reassured investors in the middle of the week by keeping their monetary position unchanged even recognizing that economic growth is slowing down and that inflation will be greater this year following the political and commercial fluctuations of the US administration of Donald Trump.
Although uncertainty still persists, the market expects the Fed to remain impertérrite over the coming months and the interest rate is in its current range of 4.25% to 4.5% until the economy shows clearer signals of cooling and risks up to inflation are transitory in the late 2025.
“Investors are waiting for clearer signals“Julius Bäer’s chief economist, David Kohl, acknowledges after a downward movement of the US bonds to two years, more sensitive to changes in monetary policy, which they retreated until falling below 3.97%. The US bonus at ten years also contained its movement with a smaller assignment up to 4.24%.
Even with everything, volatility will persist over the coming months, according to the market, in a context in which the indebtedness costs, also for European nations, will be upwards after the flexibility of fiscal norms recently adopted at the community level and, in particular, in Germany.
The intention to increase military spending and in infrastructure caused at the beginning of the week a increase in financing costs. With everything and with it, the German 10 -year bonus has ended up stabilizing in the week over the 2.7% area, although far from 2.3% of the one that departed in early 2025.
“If Germany adopts a deficit expense, other countries could follow its example, which would lead to a more relaxed debt policy throughout Europe,” says M&G Investments portfolios, Robert Burrows, who claims to have reduced his peripheral debt portfolio. “This could weaken the confidence in European public debt, raising the cost of loans for highly indebted countries.” At the moment, the returns of the reference bonds of the countries of southern Europe (Portugal, Italy, Greece and Spain) have risen about 30 basic points since the beginning of the month.
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