ECB: Lagarde says we are closely monitoring yields, particularly those with long maturities
(Il Sole 24 Ore Radiocor) - The rise in bond yields is a phenomenon affecting global markets and is not specific to the euro area. This was stated by ECB President Christine Lagarde at a press conference in Berlin. “We are, of course, closely monitoring developments in the markets and, in particular, the long end of the yield curve,” she said, adding that the trend in yields had been factored into the ECB’s projections. The rise is driven by a number of factors, starting with the balance between supply and demand and the substantial financing requirements of AI-related activities. “Any AI-related activity is currently a potential consumer of funding,” Lagarde observed. These funding needs, previously met predominantly through the equity market, are now shifting “clearly towards bonds and private credit”. Other factors influencing yields include the fundamentals of individual economies. The US market, too, given its size, liquidity and ability to influence other markets, “is playing a role”, Lagarde concluded.
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