The Telegraph, March 7, Roger Bootle
In the 1990s, president Bill Clinton’s adviser James Carville quipped: “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.”
For a long time, the joke did not appear to be ageing well. Bond markets were not intimidating anybody as central banks mopped up huge amounts of debt and investors fell over themselves to lend to governments – sometimes even at negative rates.
But all this has now changed. In the US, the yield on 10-year government bonds has risen from 1pc to 1.6pc in five weeks. And in the UK, our 10-year yield has gone from 0.25pc to 0.75pc. Not that much, you might think, but proportionately it is a big move. So what is behind these bond market flurries? And how far could the rise in yields go?
Click here to read the piece in full.