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Month in Review
The Federal Reserve kept interest rates unchanged at its April meeting, at 3.50%-3.75% for a third consecutive meeting. With the Middle East conflict pushing energy prices sharply higher, inflation risks have kept the Fed from moving toward any near-term easing. Bond yields have remained elevated, and uncertainty around the policy path continues to drive market volatility. A new Fed Chair is set to take over on May 15.
The ECB also kept rates unchanged at 2% at its April meeting. Eurozone inflation jumped to 3%, driven largely by rising energy costs, while economic growth slowed to 0.8% in 1Q26. Germany's ongoing fiscal expansion on infrastructure and defense has added further upward pressure on borrowing costs across the region, making European bond markets more volatile and harder to predict. Markets are now pricing in the possibility of rate increases rather than the cuts widely expected earlier in the year.
Georgian Market
In Apr-26, two bonds were issued on the Georgian local corporate bond market - Bank of Georgia (US$ 40mn 1-year) and Lopota (US$ 1mn, 1- year).
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