0 reactions
Long-term borrowing costs rose across major economies on August 18, with investors demanding higher returns on government bonds. 📈 Axios reported 30-year yields of 5.3% in the United States, 4.1% in Japan, 4.9% in France, 3.7% in Germany and 5.8% in the United Kingdom.
Oil prices above $90 a barrel revived inflation concerns, but the rise in long-term yields began before the latest oil move. The sell-off has also been linked to heavy government borrowing and debt issuance for AI data centers, chips and power infrastructure.
The change reaches beyond bond traders: higher benchmark yields can feed into mortgage rates, corporate financing costs and public debt-service bills. 🏠 Governments and companies with debt coming due are more exposed than borrowers locked into long-term fixed rates.
The World Bank has warned that rising debt is already increasing borrowing costs in developing economies, where aggregate government debt has risen from under 40% of GDP in 2010 to more than 70%. It found that the cost of additional debt rises more sharply when debt is already high.
The next question for markets is whether inflation, energy disruptions and fiscal pressures ease enough to lower the premium investors demand for long-dated bonds, or whether expensive long-term financing becomes a more durable feature of the global economy. 🌍
https://nutanica.com/Global_bond_market
Oil prices above $90 a barrel revived inflation concerns, but the rise in long-term yields began before the latest oil move. The sell-off has also been linked to heavy government borrowing and debt issuance for AI data centers, chips and power infrastructure.
The change reaches beyond bond traders: higher benchmark yields can feed into mortgage rates, corporate financing costs and public debt-service bills. 🏠 Governments and companies with debt coming due are more exposed than borrowers locked into long-term fixed rates.
The World Bank has warned that rising debt is already increasing borrowing costs in developing economies, where aggregate government debt has risen from under 40% of GDP in 2010 to more than 70%. It found that the cost of additional debt rises more sharply when debt is already high.
The next question for markets is whether inflation, energy disruptions and fiscal pressures ease enough to lower the premium investors demand for long-dated bonds, or whether expensive long-term financing becomes a more durable feature of the global economy. 🌍
https://nutanica.com/Global_bond_market
| 4,000 mlx | |
| 9 | |
| 0 |