ECB hails the bonds yields surge

Photo: EPA Isabel Schnabel

The European Central Bank has welcomed the rise in nominal bond yields, Reuters reported. The institution commented that the increase is a sign for working anti-crisis measures. The surge in yields comes in time with rising inflation.

“For example, a rise in nominal yields that reflects an increase in inflation expectations is a welcome sign that the policy measures are bearing fruit,” ECB policymaker Isabel Schnabel said. “Even gradual increases in real yields may not necessarily be a cause of concern if they reflect improving growth prospects.”

She reaffirmed, however, that higher long-term real yields, which are adjusted for inflation, in the early part of an economic recovery may choke growth and would warrant a reaction by the ECB.

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