© Reuters.
By Scott Kanowsky
Investing.com — Stocks and bonds around the world tumbled on Thursday, as investors digested a series of central bank interest rate rises aimed at cooling down red-hot inflation.
In a whirlwind day of monetary policy decisions, the Swiss National Bank issued a surprise hike, followed by a increase from the Bank of England. Both the SNB and BoE warned that inflation may remain stubbornly high, with prices in the U.K., in particular, estimated to soar to more than 11% this year.
The moves followed aggressive tightening from the Federal Reserve on Wednesday, with the U.S. central bank upping borrowing costs by 75 basis points – the most since 1994.
As of 0946 EST (1346 GMT), the pan-European – which had climbed a day earlier after the European Central Bank unveiled a plan to bolster weaker economies from higher borrowing costs – declined by 2.34% at 403.42. Britain’s , Germany’s , the in France, and the in Italy also sold-off. In the U.S., the , , and all tumbled at the open as well.
Meanwhile, bond prices also slid, with U.S. Treasury yields rising 78 basis points to 3.421%. In Europe, the closely-watched German bond yield also jumped by more than 9%, while its counterpart increased by 1.27%. Bond yields typically run counter to prices.
In currencies, the recovered from some initial losses to strengthen against the dollar by 0.66% to $1.22. The also made gains against the euro, up 2.09% to €0.98. Elsewhere, the – which tracks the greenback against a basket of currencies – fell by 0.59%, after it came off a 20-year high following the Fed’s decision.
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