The pressure is impacting long-dated bonds around the world, due to the same concerns about the oil-driven inflation shock and government spending. Germany’s 30-year yields touched the highest since 2011, and the equivalent UK rate rose to a level last seen in 1998. Australian peers set a fresh record high in data going back to 2016, while the yield on a Bloomberg index of global sovereign bonds climbed the highest in almost two decades.
It’s a movement up along most of the curve:
Figure 1: Yield curve as of 8/18 (blue), as of 8/19 (orange), as of 9/1 (green), all in %. Source: Treasury.
Well, for the oil induced inflation shock, we can thank Trump’s war of choice. For the debt issue, one might be tempted to say we’d be facing this problem without Trump. True to some extent, but the OBBBA is to blame for blowing a big hole in our finances, accelerating the pace of debt accumulation (along with on again off again tariffs).