Race Between BOE and Fed

Investors may be too confident that Bank of England Governor Mark Carney will increase interest rates before his U.S. counterpart Janet Yellen.

Two-year gilt yields rose to the highest since 2011 relative to similar-maturity U.S. notes last month as a strengthening U.K. recovery fueled speculation BOE officials might increase the benchmark rate from a record low as early as this year.

The yield difference has since narrowed, and with the American economy springing back to life in the second quarter the spread is set to tighten further, according to strategists at Fathom Consulting and ADM Investor Services International.

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.