ECB Vice President Says High Global Bond Yields Do Not Threaten Financial Stability

ECB Vice President Luis de Guindos stated that market bets on further interest rate hikes by the European Central Bank are primarily driven by rising energy prices, but policymakers will consider broader economic indicators when deciding on the next steps. He emphasized that the pricing of the interest rate path is mainly driven by rising energy prices, but monetary policy decisions will not solely focus on energy prices; rather, they will examine a wider range of data and standards. He pointed out that if inflation remains high in the autumn and affects household income and consumption behavior, it will have a suppressive effect on GDP. De Guindos noted that global bond yields have risen to levels not seen since before the financial crisis due to rising inflation and interest rate expectations, as well as the massive borrowing demands from governments and tech companies. However, these trends do not pose a threat to financial stability, as eurozone banks are well-capitalized and have ample liquidity.

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