According to a report from a financial news outlet, Karsten Junius, Chief Economist and Head of Economic Research at Swiss private bank Julius Baer, believes that as economic activity continues to show resilience, global central banks are facing increasing pressure to further tighten monetary policy. Financial markets have correspondingly raised their expectations for future policy rate trajectories, pushing bond yields in major economies even higher.

Julius Baer's latest forecast projects that by 2027, the Federal Reserve will raise its policy rate to 5%, the Bank of England will lift its rate to 4.25%, the European Central Bank will increase its rate to 3%, the Bank of Japan will raise its rate to 2%, and the Swiss National Bank will raise its rate to 0.5%. Several emerging markets are also likely to further tighten monetary policy.

Karsten Junius noted that current elevated bond yields have significantly improved the future risk-reward balance. However, further volatility may still occur in the short term. As a result, the bank has revised upward its forecasts for US dollar interest rates and bond yields, implying that the dollar may strengthen more than previously expected. Meanwhile, market concerns over France's fiscal condition are adding further short-term pressure on the euro.