The bond markets are screaming – will stock markets listen?
The bond markets are experiencing significant turmoil as investors react to rising government debts and inflation concerns. This has led to a sharp increase in bond yields, particularly in the U.S. and Japan, which may influence central banks to raise interest rates. Despite these developments, stock markets have remained relatively stable, although this could change as the economic landscape evolves.
- ▪Bond prices have plunged recently, signaling investor alarm over rising government debts.
- ▪U.S. Treasury bond interest rates have increased by over a quarter of a percentage point in the past month.
- ▪The war in Iran may prompt central banks to raise rates to combat inflation, potentially slowing economic growth.
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Open this photo in gallery:John Rapley writes that the war in Iran may prod central banks to raise rates to fight the inflation it has worsened.Adrian Wyld/The Canadian PressShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountJohn Rapley is a contributing columnist for The Globe and Mail. He is an author and academic whose books include Why Empires Fall and Twilight of the Money Gods.Throughout the Iran war, stock markets have rallied and oil has remained relatively subdued, rising much less than analysts feared would happen once the Strait of Hormuz was closed. The bond market has regularly tut-tutted this complacency, expressing disapproval if not outright alarm.
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