A global bond selloff sent long-term borrowing rates still higher on Friday as traders bet that inflation will remain elevated.
Yields on Japan’s 10-year bonds rose to their highest level in three decades, while US Treasury yields hovered above 5%, a level not seen since the 2007 financial crisis, helping push American mortgage rates to more than 7%.
JP Morgan’s chief economist predicted the surge in energy prices sparked by the US-Iran war would persist, with supply bottlenecks and rising commodity prices stoking inflation too.
The higher borrowing costs are squeezing public finances: Global debt topped $365 trillion — equivalent to roughly three times GDP — prompting experts to warn governments were caught in a “vicious cycle” of short-term fixes and long-term vulnerability, CNBC reported.
