How to understand the bond rally, with the US one challenging 5%
Investors are discounting a stage of higher interest rates and demanding higher returns on debt to cover a scenario of uncertainty.
Renewed tensions in the Middle East and rising energy prices have led to increased uncertainty, causing investors to demand higher returns on debt. The 10-year US bond yield briefly hit 5% on Wednesday, its highest since 2007. European bond yields are also rising, with German and Spanish bond yields at their highest since 2011 and 2013 respectively, and Italian debt yields reaching their highest since 2023.
The situation may force central banks to maintain restrictive monetary policies, with the European Central Bank having recently raised interest rates and the US Federal Reserve expected to follow suit.
Written by urgent.news from Expansion ES's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
