Bund yields have risen significantly.
(Photo: action press)
Frankfurt The bond markets are in turmoil. “There has never been such a strong increase in yields over generations,” says Thomas Meißner, senior financial market strategist at Landesbank Baden-Württemberg (LBBW). The linchpin for long-term capital market interest rates are the ten-year German government bond and the ten-year US government bond. And within a short period of time they have reached their highest levels for many years.
Since the beginning of the year, the yield on ten-year Bunds has soared from just under minus 0.2 percent to an eight-year high of almost 1.2 percent. The yield on the 10-year US Treasury has more than doubled from 1.5 percent to as high as 3.2 percent, its highest level since November 2018.
Markets calmed down somewhat on Wednesday, and yields fell back to 1% and below 3% respectively. According to Christian Lips, chief economist at NordLB, there are no short-term signs that the bond market has calmed down.
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