– Long-term government-bond yields have risen sharply across advanced economies, with higher yields feeding further market stress and pushing yields even higher.

– In Europe, echoes of the 2011-12 sovereign-debt crisis are emerging in the renewed widening of core-versus-peripheral spreads.

– France is being treated by markets as part of the periphery, rather than as a core euro-area sovereign.

– The ECB is better equipped than in 2011-12, with bond-buying tools intended to prevent disorderly yield moves from threatening the single currency.

– Despite that toolkit, the ECB continues quantitative tightening, allowing maturing bonds to roll off rather than reinvesting, while long rates are already under pressure.

– QT increases the share of government-bond supply that private investors must absorb, adding upward pressure to yields at a sensitive moment.

– There is nothing inherently “normal” about the size of a central bank’s balance sheet; the appropriate size depends on prevailing economic, market and regulatory conditions.

– Post-crisis banking rules require banks to hold more high-quality liquid assets, while non-bank market-makers have become more important in sovereign-bond trading; both changes that can make bond markets more fragile under stress.

– The current liquidity framework may raise banks’ funding costs, encourage greater holdings of sovereign bonds, and reinforce the bank-sovereign “doom loop.”

– The article calls for the ECB to pause QT, rely primarily on the short-term policy rate to fight inflation, and wait for more stable market conditions before further shrinking its balance sheet.