Global Bond Yields Surge to Pre-2008 Levels Amid Rising Inflation

The bond market is in turmoil as government borrowing costs rise globally, reaching levels not seen since the 2008-9 financial crash. Government bond yields have increased sharply since the end of the pandemic slump, making it more expensive for governments to borrow money.

Bond yields are rising because investors expect higher inflation and a decrease in the purchasing power of their fixed returns. Rising global inflation is driven by supply-side issues, such as post-pandemic supply chain bottlenecks and the conflict in the Middle East. Energy costs have increased significantly, pushing oil prices 50% higher.

Mainstream economists and financial analysts are sounding alarms about the rising bond yields and government debt levels. Central banks are considering hiking policy interest rates to combat inflation, which would increase borrowing costs for governments and households. The European Central Bank has already begun this process, and other major central banks may follow suit.