NewsNovo
A global bond sell-off is making the case that the world is entering a higher-rate era.
What complicates that thesis is distribution: higher borrowing costs do not fall evenly, and the pressure concentrates where debt loads are heaviest and the capacity to absorb higher servicing costs is thinnest.
What's changed is the combination of forces driving the sell-off. High government debt issuance has expanded bond supply, placing more paper in front of buyers who now demand a higher premium to hold it.
An oil-price shock has reignited inflation concerns at the moment when disinflationary conditions had encouraged markets to expect rate relief.
Keep reading