Bond vigilantes return, fears are growing as global government bonds keep falling and borrowing costs rise, nearly three months into the Iran war, the Financial Times reported.
The report said bond prices kept sliding even after stock markets recovered. Higher energy prices have raised investor concern that inflation may stay embedded in the financial system.
Bond yields rise when prices fall. The FT said one fund manager saw benchmark US borrowing costs climb another 0.1 percentage points during a short presentation.
Central banks had expected inflation pressure to ease, according to the report. However, sticky energy costs have forced investors to reassess the outlook for rates and debt markets.
Read: US Debt Interest Costs May Rise on Iran War, Bill $8bn As Yields Jump
The FT said market professionals now see the sell-off as more than a short-term move. It said the persistent rise in government borrowing costs has revived fears of bond-market discipline.
