- The typically austere German government is poised to dramatically boost the supply of government debt. Investors had not anticipated such a big move and then also had to trim their expectations for future rate cuts from the ECB, pushing yields higher. Market uncertainty also looms large amid Donald Trump’s tariffs and trade-war worries.
The global bond selloff continued Thursday after the European Central Bank indicated future interest-rate cuts might pause or slow this year. The fixed-income selling spree started the day prior because of German fiscal policy, however, as a historic deal to reform debt policy rules shocked investors. That caused a surge in borrowing costs that cascaded to other markets, including the U.S.
