The bond market remains unperturbed for the time being
10-year bund yields are up by over 5 bps to -0.30% today and that pretty much cancels out the drop from yesterday after Lagarde’s remarks here.
This is going to be one long and drawn out battle between central banksters and the market in the next year or so and we are only at the beginning.
I would argue that policymakers also don’t see much need to really step in with sterner intervention, as they have reaffirmed that any talk of inflation – or at least sustained inflation – is still a long ways to go.
So, the market will do what it wants to do for now. But we’ll see how much is too much if it risks upsetting the status quo.