Global Borrowing Costs Rise Due to Increasing Bond Yields

Rising bond yields are increasing borrowing costs for governments, businesses, and households worldwide. For over a decade, governments have benefitted from low borrowing costs, but this trend may be coming to an end. Government bond markets are signaling concerns globally. In major economies, yields—the interest rates that governments pay to borrow—are rising to levels not seen in years, and in some cases, decades. Investors are factoring in more risk before lending to governments that already have significant debt. Persistent inflation, geopolitical tensions, and the potential for central banks to maintain higher interest rates for an extended period are contributing to these higher borrowing costs, which in turn are raising the rates that banks charge companies and homeowners.