Bond yields are experiencing a rapid increase, with ten-year gilts now at 5.4%. Similarly, ten-year Treasuries have reached 5.2%. German and Japanese bond yields are also at their highest levels in two decades.
Many investors reportedly view these bonds as attractive, though the current yield levels suggest money is not yet flowing back into them significantly. The average ten-year gilt yield since 2000 has been 3.3%, but this period included central-bank intervention. Looking further back, the average since 1980 was 6%, and since 1960, including the 1970s, it was 6.9%.
The reasons for the rise in bond yields are being considered, including fears of higher inflation, concerns about government finances, increased supply of long-term corporate debt, or expectations of robust growth driving higher short-term rates.