This week’s bond meltdown has sent the mean 10-year borrowing cost for Group of Seven countries to its highest in more than a decade, with the average yield surging above 3%. What happens next could set the tone for financial markets and the global economy for years to come. And your guess is as bad as mine as to where fixed-income markets go from here.
It’s not just traders and investors who will feel the pain from the climb in government bond yields. Companies seeking to borrow to invest and house buyers trying to afford a mortgage will all have to cope with interest rates that are far higher than the world has become accustomed to for much of the 21st century.