Germany’s 10-year Bund yield climbed above 3.45%, reaching its highest level since April 2011, as markets assessed the ECB’s latest rate decision and renewed energy-price pressures. The ECB (European Central Bank) delivered its second rate increase since the US-Iran war began and warned that inflation could remain well above its 2% target for an extended period. The central bank held its 2026 inflation forecast at 3.0% but raised projections for 2027 and 2028 to 2.5% and 2.1%. It also upgraded GDP growth forecasts to 0.9% for 2026 and 1.4% for 2027, while leaving the 2028 projection unchanged at 1.5%. Brent crude reached $105 a barrel, and European gas prices hit fresh three-and-a-half-year highs as Middle East tensions escalated. Markets are pricing in another ECB rate hike by December, with further tightening expected in 2027.