I. From The Good To The Bad To The Ugly
The spectrum of explanations for the rise in bond yields worldwide includes relatively benign ones to downright dangerous ones (chart). On the good side of the spectrum, better-than-expected economic growth has driven US bond yields up to levels that are back to normal. On the ugly side, soaring bond yields in France are signaling a looming debt crisis. In between are bad scenarios that explain the synchronized rise in global bond yields. These include the inflationary energy shock attributable to the war in the Middle East and the unwinding of the yen-carry trade.
Let's have a closer look at the good, the bad, and the ugly:
