https://www.morningstar.com/bonds/why-bond-yields-are-risingand-might-keep-heading-higher
- Global bond markets have sold off sharply, sending yields to multi-decade highs.
- Investors say bond markets in the US, Japan, and Europe are responding to a range of factors, including growing government deficits and ballooning AI debt.
- The latest rout follows a steady march higher in bond yields, with analysts suggesting the trend could continue.
Major government bond markets from the United States to Japan have been selling off, driving yields to their highest levels in many years.
Behind the drop in bond prices and rise in borrowing costs for governments, companies, and individuals, analysts see a diverse group of strong forces. They include rising government deficits, a massive increase in corporate borrowing to fund the artificial intelligence buildout, and concerns about inflation sparked by the jump in energy prices amid the Iran war. “It’s multifaceted,” says Brad Collins, senior fixed-income client portfolio manager at Vanguard. “There are so many components at play.”