ECB Focuses on Inflation, Not Bond Spreads, Nagel Says
French 10-year bond yields rose to 5.33% as the ECB said its debt-buying tools are meant to support price stability, not cap spreads.
- French 10-year bond yields surged to just under 5% on Friday, their highest level since 2002, while the spread against German Bunds widened to the most in almost 15 years.
- France unveiled its 2027 budget bill last Thursday, drawing investor attention to debt expected to reach an all-time high of 119% of GDP this year, while plans to sell record bonds stoked fiscal concerns.
- European Central Bank policymaker Joachim Nagel said on Thursday the bank's tools are designed to safeguard price stability, not target specific bond spread levels, rejecting intervention speculation.
- Economist Mohamed El-Erian warned that "contagion risk is back in Europe," as Italian and Greek 10-year bond yields spiked 18 basis points last week to 4.74% and 4.57% respectively.
- Stephen Coltman, head of macro at 21shares, warned that with debt-to-GDP well in excess of 100%, refinancing existing debt at rates approaching 5% will impose substantial shocks to public finances.
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While the 10-year borrowing rate has reached an unprecedented level since 2002, Emmanuel Moulin calls for "recovery of public finances".
As the 2027 budget arrives at the National Assembly, the governor of the Banque de France warns about the cost of the debt which could rise by 12 billion euros next year France risks
As France’s debt crisis intensifies, the central banker argues that the country must clean up its public finances. And he calls on Parliament to vote on the Le Corneille government’s budget. The post France: Central Bank Calls on Parliament to Approve Budget – Otherwise, It Sees Economic Collapse appeared first on in.gr.
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France's debt crisis is sparking fears of wider financial contagion
Riccardo Milani / Hans Lucas / AFP via Getty ImagesInvestors are growing anxious about financial contagion as France's bond market convulses. French bond yields have spiked amid concerns about debt, inflation, and political unrest.The bond sell-off is spilling over into other nations, sparking fears of a larger event.A sell-off in the US bond market has shaken investors in the last few months, but traders are also nervously eyeing fixed income t…
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