Did the Hawkish ECB Help Fuel the Treasury Selloff?
Dow Jones
Yesterday
The ECB lifted some of its inflation forecasts and warned inflation is "set to remain well above target for an extended period." That language marked a shift from the central bank's July policy decision, where it emphasized energy prices were still close to its baseline forecast and highly uncertain. Capital Economics described the ECB's latest language as "somewhat hawkish."
ECB decisions aren't usually a major focus for U.S. investors, but the statement appeared to add fuel to the selloff in the U.S. Treasury market, which was already under pressure from higher oil prices. The 10-year Treasury yield rose to 4.912% from 4.875% just before the ECB's announcement. U.K. government bond yields also shot higher.
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