Interest rates have surged in the bond market, driving a broad decline in bond prices. Rates are rising against a backdrop of a resurgence in inflation, strong economic growth and ballooning government debt, raising concerns about higher capital costs and increased market volatility.
Interest rates have risen sharply in the bond market, while bond prices have fallen and volatility has increased. Bonds, previously regarded as “boring,” are changing into an asset class with large price swings.
The backdrop includes a resurgence in inflation, strong economic growth and ballooning government debt. These factors are prompting higher interest rates and could push up companies' cost of capital.
Higher rates are also raising concerns about their impact on the long-running equity market bull run, leaving investors considering whether to reassess their bond investments.