Bond yields rise as multiple economic pressures converge globally

Bond yields rose sharply in early 2022, with the US 10-year yield reaching 1.77 percent. That was 26 basis points higher than at the end of 2021. Several factors pushed yields up at the same time. Energy prices climbed, which made overall inflation worse. Core inflation also stayed above the levels that central banks wanted. Governments in the US, UK, Japan, Germany, and France all borrowed more money, which increased the supply of bonds. The US Federal Reserve also began buying fewer bonds each month. Investors grew worried about government debt levels, so they demanded higher returns. Rising yields make borrowing more expensive for governments and businesses, and this can slow economic growth.