20.03.202609:02:25UTC+00German Bund Yield Remains Close to 15-Year High

Germany’s 10-year Bund yield held at 2.95% on Friday, just below Thursday’s nearly 15-year high of 3.01%. The continued upward pressure reflects mounting expectations of imminent interest rate hikes, following a stark warning from the European Central Bank about rising inflation risks.

Although the ECB left rates unchanged on Thursday, it adopted a more hawkish tone, lifting its inflation projections and cutting its growth forecasts amid surging energy prices driven by the conflict involving Iran. In response, major banks now expect a rate rise as soon as April. Money markets are fully pricing in an increase by June and assign a 60% probability to a move in May.

ECB policymaker Joachim Nagel emphasized that a rate hike as early as next month remains possible if inflationary pressures persist, while Francois Villeroy de Galhau reiterated the central bank’s readiness to act as needed.