The Weekly Brief
20-01-2025
Thought of the week
Global bond yields have marched higher in recent months, as investors rethink the path for central bank policy rates ahead. The moves were led by the US, where resilient growth expectations contributed to an 85 basis point rise in the 10-year Treasury yield since September, in turn exerting upward pressure on bond yields elsewhere. Breaking down the recent rises in government bond yields suggests that investors remain confident in central banks’ ability to control inflation over time. Inflation expectations have drifted somewhat higher, but recent moves are mostly due to an increase in real yields, reflecting investors' realisation that interest rates are likely to remain higher than previously hoped. In the short term, rate volatility may remain high, but for investors with longer horizons bonds now offer levels of real income not seen since before the global financial crisis.
Rising real yields have pushed bond yields higher
Change in 10-year govt. bond yields since 30 Sep 2024, basis points
More Insights