Good morning. Unhedged expects that there was a general sense of relief at the Federal Reserve and the US Treasury as the 10-year Treasury yield fell yesterday. That yield is now 6 basis points below 5 per cent — the level at which the contest between the bond and stock markets goes to a penalty shootout. Still a bit of extra time to play, then. Send us an email and tell us how much: [email protected].

Yesterday, the Bank of England held interest rates at 3.75 per cent, while signalling there may be rate rises to come. It is one of only two G7 central banks that hasn't raised rates since the start of the Iran war; the other is the Bank of Canada, and it's facing a very different kind of shock. The Bo E looks like an outlier, and not for the first time.

For proper finance nerds, there was an even more interesting announcement: a change to the balance sheet strategy. The Bo E said it would hold a large share of its bonds — about £341bn of the £488bn portfolio — to maturity, rather than sell them. This is a big step back from the previous hard-headed approach to balance sheet normalisation. The Bo E also said it is considering selling the remaining £147bn or so of gilts to the UK Debt Management Office, instead of the market. Governor Andrew Bailey has often asserted that when the final accounting is done, the lifetime impact of QE will be positive. He may well be right.