Ms Schnabel reviewed the latest financial market developments, noting that since the Governing Council’s previous monetary policy meeting on 9-10 March 2022 investor risk sentiment had improved considerably. Euro area equity prices had moved close to the levels recorded prior to the war in Ukraine, sovereign spreads had narrowed, and risk-free yields had increased markedly. At the same time, market-based measures of inflation compensation had continued to creep higher and stood well above the Governing Council’s 2% target over the entire horizon. Developments in sovereign yields in the euro area since the previous ... (full story)