“We should get used to periods of higher volatility,” Draghi said at a press briefing, Bloomberg reports. “At very low levels of interest rates, asset prices tend to show higher volatility. The Governing Council was unanimous in its assessment that we should look through these developments and maintain a steady monetary policy stance.”
Draghi pointed to several factors that contributed to the recent market pullback, including improved economic and inflation outlook, heavier issuance, poor market liquidity, volatility and absence of certain investors.
The remarks also sent benchmark 10-year Treasury yields below its 200-day simple moving average.
“This is sheer panic in the market from the standpoint of what’s been happening in Europe,” Thomas di Galoma, head of fixed-income rates and credit at ED&F Man Capital Markets, said in the article. “Most of Wall Street is guarded here as far as taking on new positions.”
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Max Chen contributed to this article.