On Friday, yields on major global bonds rose again, and the wave of sell-offs made a comeback. The Federal Reserve and the Bank of Japan both raised interest rates this week. As concerns about inflation continue to rise, capital is watching the possibility of a new escalation of the global austerity cycle. Recently, major central banks are stepping up their anti-inflationary efforts: following the ECB's rate hike, the Federal Reserve raised interest rates by 25 basis points on Wednesday and sent a signal that it will raise interest rates again this year, which convinced the market of the Fed's determination to fight inflation. However, the underlying factors driving up bond yields have not disappeared: the risk of oil prices remaining high for a long time, the size of government debt, and capital competition from AI-related companies. Daniela Hathorn, senior market analyst at Capital, said, “The Federal Reserve has indeed strengthened its credibility against inflation, but huge government debt issuance, higher term premiums, and increased competition for private sector capital mean that long-term returns are a support that is difficult to resolve with monetary policy alone.”

On Friday, yields on major global bonds rose again, and the wave of sell-offs made a comeback. The Federal Reserve and the Bank of Japan both raised interest rates this week. As concerns about inflation continue to rise, capital is watching the possibility of a new escalation of the global austerity cycle. Recently, major central banks are stepping up their anti-inflationary efforts: following the ECB's rate hike, the Federal Reserve raised interest rates by 25 basis points on Wednesday and sent a signal that it will raise interest rates again this year, which convinced the market of the Fed's determination to fight inflation. However, the underlying factors driving up bond yields have not disappeared: the risk of oil prices remaining high for a long time, the size of government debt, and capital competition from AI-related companies. Daniela Hathorn, senior market analyst at Capital, said, “The Federal Reserve has indeed strengthened its credibility against inflation, but huge government debt issuance, higher term premiums, and increased competition for private sector capital mean that long-term returns are a support that is difficult to resolve with monetary policy alone.”