Austrian government bond prices were mixed in late trading on Tuesday. The yield on the landmark 10-year Austrian benchmark bond rose 5 basis points to 0.88 percent. The yield spread to a comparable German bond was 37 basis points.
Interest rates are currently being boosted by high inflation, which is likely to continue to rise. In view of the development, US Federal Reserve Chairman Jerome Powell said on Monday evening that the central bank might raise its key interest rate more than the usual 0.25 percentage points per interest rate meeting. Other high-ranking central bankers from the USA had already made similar statements. The Fed initiated the turnaround in interest rates last week by raising its key interest rate for the first time since 2018 and promising a series of further hikes.
On Tuesday, James Bullard, regional central bank chairman from St. Louis, once more advocated a rapid tightening of monetary policy. He recommends raising interest rates quickly to an anti-inflationary level. Bullard is seen as a representative of a particularly tight monetary policy. A few days ago he said he wanted to raise the US interest rate to more than three percent by the end of the year.
Yields of selected Austrian benchmark bonds:
Laufzeit Aktuell Vortag Veränderung Spread (in Basispunkten) 2 Jahre -0,43 -0,41 -0,02 -19 5 Jahre 0,36 0,28 +0,08 12 10 Jahre 0,88 0,83 +0,05 37 30 Jahre 1,19 1,17 +0,02 52
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