Central Banks Unite Against Inflation as Global Economy Shifts

The global economy is shifting gears, with major central banks taking decisive action to combat inflation. The U.S. Treasury yields rose on Friday, with the 10-year yield returning to 5%, as markets absorbed the Federal Reserve's latest rate increase and a broader wave of global monetary tightening.

In Japan, the Bank of Japan raised its policy rate by 25 basis points from 1% to 1.25%, taking borrowing costs to their highest level in 31 years. The decision was approved by a 7-2 vote, with Toichiro Asada and Ayano Sato opposing the increase.

The Bank of England left interest rates unchanged but announced a significant overhaul of its quantitative tightening operations, reducing pressure on the long end of the gilt market. The 30-year gilt yield fell by 12 basis points after the announcement.