The global sovereign bond market is experiencing a rare wave of simultaneous sell-offs, and long-term borrowing costs in major economies such as Japan, the United Kingdom, and France have all climbed to the highest level in decades. The most direct trigger for this round of global bond sell-off was the impact of inflation brought about by the sudden escalation of the situation in the Middle East. The sharp rise in bond yields is having a ripple effect on the real economy. CNN reports that bond yields determine the cost of various types of borrowing, from mortgages to corporate finance. A sharp rise in yield is likely to drive up the costs of mortgages, auto loans, and commercial loans, leaving businesses and consumers alike facing higher costs. A sharp rise in bond yields will also put pressure on the stock market. Tech giants are issuing large numbers of bonds to actively raise capital for the artificial intelligence boom, increasing the pressure on the bond market. Federal Reserve Chairman Kevin Walsh said at the Jackson Hole Economic Policy Seminar a few days ago that inflation is “worrying,” which made investors re-evaluate the possibility of the Fed raising interest rates at the September 15-16 meeting and sell bonds. The data showed that the Eurozone inflation rate rose to more than 3% in August, consolidating bets on the ECB's interest rate hike in September.

The global sovereign bond market is experiencing a rare wave of simultaneous sell-offs, and long-term borrowing costs in major economies such as Japan, the United Kingdom, and France have all climbed to the highest level in decades. The most direct trigger for this round of global bond sell-off was the impact of inflation brought about by the sudden escalation of the situation in the Middle East. The sharp rise in bond yields is having a ripple effect on the real economy. CNN reports that bond yields determine the cost of various types of borrowing, from mortgages to corporate finance. A sharp rise in yield is likely to drive up the costs of mortgages, auto loans, and commercial loans, leaving businesses and consumers alike facing higher costs. A sharp rise in bond yields will also put pressure on the stock market. Tech giants are issuing large numbers of bonds to actively raise capital for the artificial intelligence boom, increasing the pressure on the bond market. Federal Reserve Chairman Kevin Walsh said at the Jackson Hole Economic Policy Seminar a few days ago that inflation is “worrying,” which made investors re-evaluate the possibility of the Fed raising interest rates at the September 15-16 meeting and sell bonds. The data showed that the Eurozone inflation rate rose to more than 3% in August, consolidating bets on the ECB's interest rate hike in September.