HSBC's Major Says BOE Can’t Go Far With Yield Curve

The video discusses the negative real yields on gilts in Europe, focusing on the Bank of England's dovish stance and its implications for interest rates. It compares the UK and US yield curves, highlighting the challenges of hiking rates with a flat curve. The impact of inflation on real yields is examined, with predictions on future inflation and yield changes, suggesting that real yields may become less negative over time.

What is the main reason for the negative real yield on gilts in the UK?

• High inflation rates

• Bank of England's dovish stance

• Strong economic growth

• Rising nominal yields

Why is it unusual for a developed market central bank to hike rates with a flat yield curve?

• It reflects uncertainty in the market

• It is typically associated with emerging markets

• It suggests a lack of inflation

• It indicates strong economic growth

How does the UK yield curve compare to the US yield curve?

• Both are steepening

• UK's is flat while US's is flattening

• Both are flattening

• UK's is steepening while US's is flat

What could cause real yields to become less negative over time?

• A decrease in nominal yields

• A rise in inflation

• Inflation being transitory

• A fall in sterling value

What is the relationship between nominal yields and real yields when inflation is high?

• Nominal yields are close to zero

• Real yields are higher than nominal yields

• Nominal yields are higher than real yields

• Real yields are positive