Bond market: the ECB is ready to block the rise in rates
Europe's central bank has announced it is ready to block following rising tensions between nations. It supports its decision by the fact that the increase in the rate of government borrowing has led to inflation, and is reflected in the price index.
The announcement of the European Central Bank's decision
Fabio Panetta, senior official of the European Central Bank, announced on Tuesday March 02, 2021, the decision of the financial institution to block bond issues and said he had put in place a fairly relevant mechanism to slow the surge in interest rates. Borrowing from the States. He believes that the bank is determined to fight the rise in interest rates which weakens the sovereignty of borrowing in the euro zone compared to US bonds. To describe the mechanism, Fabio Panetta asserted that the bank will use the anti-crisis financial envelope without embarrassment to deal with the pandemic and suspend interactions between states which create more problems for stability in the bond market.
The decision to control the rates
Christine Lagarde, the Chairperson of the European Central Bank and some board members have repeatedly noted the willingness of the institution from Frankfurt to play its role to regulate things if rates are continually increasing uncontrollably. They announced the bank's ability to firmly control the yield curve. The aim is to preserve stability under these conditions with a view to restoring rates to 2% in accordance with the monetary policy of the European Central Bank.
To achieve this objective, the bank wants to establish monitoring indicators in order to continuously measure sovereign and government and corporate borrowing rates.