FX.co ★ German Bund Yields Rise as Investors Digest Policy Action

Germany's benchmark 10-year Bund yield rose to 2.5% as investors digested the latest decision from the U.S. Federal Reserve and anticipated the outcome of the Bank of England's meeting scheduled for later today. The Federal Reserve maintained its current interest rates, as was widely expected, but issued a cautionary note that President Donald Trump's tariff policies could lead to higher inflation, reduced economic growth, and a rise in unemployment, thereby clouding the U.S. economic forecast. In the United Kingdom, market participants predict that policymakers will announce a fourth consecutive interest rate reduction of 25 basis points to bolster growth and stabilize inflation expectations amid ongoing trade conflicts. Concurrently, in the Eurozone, money market trends are now factoring in the European Central Bank's deposit facility rate at 1.6%, an increase from just under 1.55% in mid-April. This adjustment follows indications from the ECB that it is prepared to enact further rate cuts to support economic growth.