Basis Points: Inflation Expectations and Money Managers

basis points: This leaves money managers with few buffers against big political missteps by Prime Minister Theresa May government, according to Global Times China. Ten-year gilt yields have risen 40 basis points, to 1.186 percent, since May criticized ultra-low interest rates on October 5 at the ruling Conservative Party annual conference. Though benchmark sovereign bond yields have climbed in the past month, this is largely explained by rising inflation expectations and fading hopes that Bank of England Governor Mark Carney might ease policy further. Her comments sparked concerns about political pressure on the Bank of England, which has independence to set monetary policy. But the recent market moves could also reflect changing expectations of higher interest rates. If politicians did start meddling with interest rates, investors should in theory demand a higher risk premium to hold gilts. (news.financializer.com). As reported in the news.