ECB, Fed Appear To Now Be In Synch On Lower For Longer – Investing.com

ECB, Fed Appear To Now Be In Synch On Lower For Longer – Investing.com

The Delta variant of the virus has emerged as an important economic force, just as more countries appeared to adopt the attitude that we should now live with it like we do with the flu, which kills hundreds of thousands every year. While the existing vaccines seem to have lost some of their ability to prevent the illness, they remain a powerful prophylactic against hospitalization and death. Nevertheless, new social restrictions have been introduced in some high-income countries, even those like Israel, that have been fairly successful in vaccinating a large part of their population.

The virus is once again raising the prospects of slowing the economic recovery that was unevenly unfolding. The preliminary July PMI for , , , and the disappointed. Expectations for the trajectory of monetary policy are being impacted. Consider that the implied yield of the December 2022 fell to 40 bp in the middle of last week from 55 bp on July 1. A similar futures contract in the UK, the December 2022 short-sterling implied yield fell from 58 bp in mid-July to almost 40 bp on "Freedom Day" as the UK dropped all social restrictions and mask requirements. The implied yield of the December