Global Bonds; a Wrenching and Worrisome Start to New Year; reverting

 

https://englundmacro.blogspot.com/2024/11/the-thinking-behind-mean-reversion.html

The widely accepted idea that rates will eventually fall back to pre-pandemic levels...

The world’s biggest bond market and global bellwether is leading a reset higher in borrowing costs, with the prospect of a prolonged period of elevated rates carrying consequences for economies and assets everywhere.

Historians point out that rising 10-year note yields have foreshadowed market and economic spasms such as the 2008 crisis as well as the previous decade’s bursting of the dot-com bubble.

And while the ultra-low rates of recent years allowed some borrowers to lock in favorable terms that have helped shield them from the latest yield surge, pressure points may build if the trend persists.

Bloomberg 12 January 2025

https://www.bloomberg.com/news/features/2025-01-12/treasury-gilt-bond-tantrum-is-wrenching-and-worrisome-start-to-year

S&P’s $18 Trillion Rally Threatened by Psychology of 5% Yields

https://englundmacro.blogspot.com/2025/01/s-18-trillion-rally-threatened-by.html