Bond yields near multi-decade highs amid inflation uncertainty

The US 30-year Treasury yield climbed above 5.3% on August 18, touching an intraday peak of 5.337%. That’s the highest it’s been since 2007, back when the iPhone was brand new and “subprime” was about to become everyone’s least favorite word. This isn’t just an American phenomenon. Government bond yields across the developed world are surging in unison, driven by persistent inflation fears, massive sovereign debt issuance, and geopolitical uncertainty that has pushed oil prices past $90 per barrel. The numbers tell a grim story The benchmark 10-year US Treasury yield hovered between 4.71% and 4.74%, a level that makes the near-zero rates of the early 2020s feel like a fever dream. Japan’s 10-year government bond yield reached just under 3%, its highest reading in 30 years. For a country that spent decades fighting deflation with ultra-loose monetary policy, that number represents something close to a tectonic shift. Europe isn’t faring any better. Germany’s 10-year Bund yield hit levels not seen since 2011, when the eurozone debt crisis was in full swing. French yields climbed to their highest since 2008. The term premium on US bonds has reached a 12-year high, indicating investor ...