Why bond yields are hitting highs across the world

Yesterday, the yield on the 30-year Treasury hit its highest level since 2007.

It’s not just a U.S. problem. Bond yields are hitting their highest level in a decade, sometimes longer, in countries like Japan, the UK, and Germany.

“Marketplace” host Kai Ryssdal spoke to Nicole Cervi, economist at Wells Fargo, about what’s happening in the world of government debt.

“Bond markets were kind of waiting to see the duration of this energy price shock,” Cervi said. “But what we’ve seen is this conflict hasn’t proven to be transitory, it’s stuck around, and so what that means is that inflation is just going to be all that more persistent.”

Now, Cervi said, bond markets are reacting to the fact that overall inflation is rising.

Click the audio player above to hear the conversation.