Why has the daily variability of long-term interest rates increased since 2021 in the euro zone and, to a lesser degree, in the United States?
Short-term, daily variability in long-term interest rates has increased significantly since 2021 in the euro zone and, to a lesser degree, in the United States. We can think of two possible explanations for this development: Increased uncertainty about the future level of inflation, monetary policy and long-term interest rates; An increase in herd behaviour among investors, which is consistent with the reduced information available to each investor on the future level of long-term interest rates .