German yields hit 2-year high on inflation fears, pare rise on US data
TLT•Fed comments and Italian and French spreads
Fed Chair Kevin Warsh said in his testimony before the House Financial Services Committee that the U.S. central bank had no tolerance for persistently elevated inflation.
"Consumer inflation expectations (in the U.S.) are within tolerable ranges, suggesting little risk of second-round price effects from the energy spike," said James Knightley, chief international economist at ING.
"Meanwhile, market inflation expectations have plunged, with 10-year break-even (U.S.) inflation rates in line with their 25-year average, while those for two-year inflation have dropped below 2%," he added.
The U.S. central bank may need to raise interest rates "in the near term" if coming data show inflation continuing well above the 2% target, Fed Governor Christopher Waller said on Monday.
Italy's 10-year government bond yields <> rose 2.5 bps to 3.88%, after reaching 3.9441%, their highest since May 20.
