As recently as May, concerns about inflation dominated the financial markets.

This applies above all to the bond market, where the yields on ten-year US and German government bonds, which are used as reference interest rates, were comparatively high at 1.7 percent or minus 0.1 percent.

But in the meantime, yields have fallen again, which is associated with rising prices on the bond market.

The ten-year yield on US stocks is now 1.345 percent, that of government bonds at minus 0.282 percent.

That is still high: In August 2020, Treasuries were still yielding 0.5 percent.

In November 2020, the corresponding yield on the federal bond was minus 0.64 percent.

However, the fall in yields, especially in the second half of June, signals an easing of concerns about inflation.

Markus Frühauf

Editor in business.

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    According to Steven Major, chief bond strategist at the British-Asian bank HSBC, the bond markets could have reached their yield highs this year.

    The high yield in March was an expression of strong economic confidence combined with inflation concerns.

    On the other hand, low returns like last summer are due to skepticism about the pandemic.

    But when the US inflation rate reached 5 percent in May, yields were already on the decline again.

    For Major, this is a sign that the market had long since priced in the higher inflation rates in bond yields.

    The central banks also contributed to this by assuring the market that they would be willing to take supportive measures.

    The representatives of the European Central Bank (ECB) in particular played down inflation concerns by emphasizing the temporary effect of the price hike.

    The representatives of the US Federal Reserve, on the other hand, want to begin the discussion about a possible throttling of bond purchases.

    In doing so, they will also keep an eye on the funds that banks park in the overnight facility with them.

    At the end of June, these jumped to a record high of almost a trillion dollars.

    The banks are giving their surplus liquidity back to the Fed, which can be seen as scope for tapering bond purchases.