Bond Sell-Off Threatens to Squeeze Borrowers Around the World

Government bond yields are hitting multi-decade highs, reflecting anxiety about debt levels, deficits and inflation. The effects will extend to mortgages, business loans and other types of credit. A global sell-off in government bonds intensified on Tuesday, pushing borrowing costs in some of the world’s largest economies to the highest levels in decades. The moves threaten to ripple through a wide range of debt, including business loans and mortgages for already stretched consumers. A combination of factors is prompting investors to demand higher returns to hold government debt: a flood of borrowing by the world’s richest nations, expanding budget deficits, persistent inflation and few signs that countries are able or willing to take steps to improve these conditions.

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