Global Bond Markets Flash Warning | Presented by CME Group

Summary

The $145 trillion global bond market is flashing a warning as long-term yields surge to multi-decade highs in the US and Japan. The sell-off suggests the low-rate, high-debt era is getting expensive, and central banks are taking notice. Although rate hikes are not imminent, the recent move makes them more likely than before.

• Long-term government bond sell-off pushes yields to multi-decade highs in the US, Europe, and Japan.
• 10-year US yield reached 4.7%, 30-year briefly touched 5.2%, levels not seen since 2007.
• Japan's 30-year yield surged to highest in its 27-year history.
• Rising yields reflect higher expectations for future short-term rates plus a higher term premium.
• The bond market is signaling that the low-rate, high-debt era is becoming expensive.
• Central banks are listening, and the sell-off increases the probability of future rate hikes.