Global bond yields—The kettle is whistling

Developed-market bond yields are rising as investors demand more compensation for inflation risk, fiscal strain and geopolitical uncertainty. What started as a higher-for-longer rate story has broadened into a global repricing across the US, Europe, the UK, Australia and Japan. In our view, some markets may be pricing in too much tightening too quickly, which could create opportunities in selected segments of sovereign debt.

At the same time, risks remain elevated because energy shocks and heavy government borrowing can keep pressure on long-end yields. Bonds still offer better income than they did in recent years, but duration is no longer a simple hedge when inflation and supply-side pressures dominate. For investors, selectivity matters more than ever as policy paths diverge and volatility stays high.