European Banks Are Sending a Warning Nobody Is Talking About

European banks are doing something that looks irrational. The European Central Bank is increasingly likely to raise its short-term policy rates again. Oil prices are still elevated. Energy costs are feeding into headline inflation. ECB officials keep coming on hawkish. And normally, if you believe short-term rates are going higher, the last thing you’re going to do is rush into government bonds. But European banks are doing exactly that. And in huge amounts.

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