QT risks boosting spread between Italian and German yields
Trimming the ECB’s 5 trillion-euro ($5 trillion) bond holdings risks blowing out spreads in the region’s periphery
Consumers in the 19-nation region are seeing prices rising at an annual rate of just under 10%, with the peak potentially still months away.
The extra yield investors demand to hold Italy’s 10-year notes over similar German bonds was around 235 basis points on Wednesday
The spread is likely to widen as Italy faces an election this month, with prospects of a government led by Giorgia Meloni
Bloomberg 7 september 2022