Euro Zone Bond Yields Rise Amid Inflation and Unemployment Warnings

Euro zone government bond yields increased following the U.S. Federal Reserve's warning of higher inflation and unemployment risks. The Fed maintained interest rates but highlighted concerns influenced by U.S. tariffs. The Bank of England is expected to lower rates, though analysts suggest it may adopt a more hawkish stance.

In a reaction to warnings from the U.S. Federal Reserve regarding potential threats of heightened inflation and unemployment, euro zone government bond yields saw an upward trend on Thursday. Investors now await the monetary policy decisions from the Bank of England, set to meet later in the day.

While the Federal Reserve kept interest rates steady on Wednesday, it highlighted concerns about the U.S. economic outlook, particularly in light of President Donald Trump's tariff policies. Germany's 10-year yield, a key benchmark in the euro area, rose 0.5 basis points to 2.48%, after previously reaching a high since April.

The Bank of England is projected to reduce rates by 0.25 bps. Some experts argue this move may be conservative given the robust economic data and limited exposure to U.S. tariffs, suggesting the BoE could adopt a more hawkish policy in future decisions.

(With inputs from agencies.)