With three-month euro interest rates then just below 3% and 10-year government bond yields just above 4%, while headline inflation was running at 2.5%, it was hard to quibble with that. Five months and two more 25bp rate increases further on, in October, he said interest rates were “still low” and monetary policy “continues to be accommodative”. No “very” this time, no “nominal and real” and no “maturity spectrum” but hardly a wild claim with three-month rates at 3.5%, 10-year yields at 3.9% and inflation projections of 2.4% for this year and next. Think back six years, when inflation was 2.4% and the refi rate peaked at 4.75%.
But not everyone sees it...
