The world appears to be entering a higher-rate era. Here’s who will pay the price
The global bond rout is raising borrowing costs across the economy and forcing governments, companies and consumers to confront the possibility that expensive debt is here to stay. Global bond yields have been climbing to multiyear highs, with Germany's 10-year yield reaching its highest since 2011, Japan's holding above 3%, U.S. 10-year Treasury yields touching their highest since November 2023 and UK gilt yields hitting a post-2008 peak in recent days. The latest leg of the sell-off is a reflection of a mix of high government debt issuance, an oil-price shock that has reignited inflation concerns and expectations that central banks may keep monetary policy tighter for longer. The move may mark more than another bout of bond-market volatility, with consequences stretching across economies and financial markets. This is the continuation of a medium-term trend that’ll keep going for many years, said Robin Brooks, senior fellow at the Brookings Institution. Natalia Lojevsky, ma...
