NEW YORK (AP) — The bond market is usually a quiet corner of Wall Street, one where moves get measured in hundredths of a percentage point. But the warning signals it sends can be powerful enough to drag stock markets up and down and in the past have even convinced President Donald Trump and other world leaders to back off some of their most extreme actions.It’s making noise again.Bond markets around the world have seen yields climb to heights not reached in years and, in some cases, decades. Atop the litany of reasons for that is oil prices and whether they will stay high because of the war with Iran. Worries about big and growing debts for the U.S. government and others are also influencing bond markets.The rising yields are putting downward pressure on stock markets after they rocketed to records on excitement about big corporate profits and the promise of artificial-intelligence technology. They’re also dragging on economies around the world. Here’s a look at what’s going on, and how things got this way:
Budding bond yieldsIn the United States, the centerpiece of the bond market has hit its highest yield in more than a year. The 10-year Treasury yield, which shows how much interest investors want the U.S. government to pay them before they’ll lend it money for a decade, has topped 4.60%. That’s up from less than 4% before the Iran war began in late February, and it’s a notable move for the bond market.Other kinds of yields are even higher. The 30-year U.S. Treasury yield has jumped well above 5% and is back to where it was in 2007, before the 2008 financial crisis sent yields crashing toward zero worldwide. In Japan, the yield on the 10-year government bond has climbed back to where it was in the 1990s.
