Italy's benchmark bond yield hits 15-month low as rally roars on

Italy's benchmark bond yield hits lowest level in 15 months despite central bank officials' attempts to rein in the exuberance. Yields have tumbled due to falling inflation and expectations of interest rate cuts from the ECB and the US Federal Reserve. Investors anticipate more than 150 bps worth of rate cuts next year. Italy's borrowing costs have benefited from lower interest rate expectations. The gap between Italy and Germany's bond yields narrows to 160 bps. Shorter-dated yields also fall. ECB officials caution against excessive optimism.

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