The topic du jour remains the bond-market bandits’ battle with bureaucrats over the long-term cost of capital. Many investors have been blindsided by the sharp increase in long-term discount rates, with the US 10-year government bond yield marching inexorably towards the all-important 5 per cent threshold.Its Australian equivalent has already pierced that barrier, climbing as high as 5.24 per cent during the week. So, what is driving this price action, and what does it mean for portfolios?Subscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? Fetching latest articles