Government borrowing costs around the world have surged to the highest levels in decades amid growing fears over US bond market turmoil.
Anxiety about Donald Trump’s handling of the US economy, and concern that the US president’s war with Iran is driving up inflation, are causing a sell-off in the US bond market.
Here we look at the factors driving the bond market, and the likely consequences.
What is happening in the bond market sell-off?
Long-term US government borrowing costs have risen to the highest level since 2007, with the 30-year Treasury bond yield trading above 5%.
A bond is a form of loan that investors make to a borrower, or bond issuer. The yield represents the money an investor receives for owning the debt as a percentage of its current price. Prices fall when investor demand wobbles, which pushes up yields.
Against this backdrop, the US Treasury secretary Scott Bessent…
