- 10-year government bond yields reached pre-financial crisis highs
- Do spiking yields warn of trouble ahead?
Cynics might argue that marking the end of the hiking cycle is easy: central bankers just raise rates until something in the financial system breaks. Earlier this month, things certainly looked precarious – as the chart shows, government bonds sold off and pushed 10-year yields to pre-financial crisis highs. The US 10-year Tresury yield even surpassed the important 5 per cent mark. Following the spike, Steen Jakobsen, chief investment officer at Saxo, said that we had "clearly reached a stage where something is breaking". He added: "The real rates are too high and the global economy is about to tilt down while central bankers are asleep at the wheel.”
