The bond markets are screaming – will stock markets listen?
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Daily finance — markets, central banks, M&A, the prints that move money. Free.
- U.S. Treasury yields rose by over a quarter of a percentage point in the past month, pushing investors to demand higher rates.
- Britain's leadership crisis raised the prospect of looser fiscal policy, unsettling bond investors.
- Japan's new government announced lavish spending, prompting bond markets to anticipate higher sovereign debt.
- Trump pressed the incoming Federal Reserve chairman to cut interest rates, a stance at odds with bond investors' demand for higher yields.
- Iran's war and its impact on the Strait of Hormuz have driven up inflation, fueling bond market worries about debt burden.
Why it matters: Investors demand higher yields, raising borrowing costs for governments like the U.S., Canada, and Japan; higher rates increase debt service burdens, squeezing fiscal space and potentially slowing economic growth.
