While stock markets continue to be at near-record highs, seemingly oblivious to the enormous geo-political and economic turmoil—war, tariffs, massive uncertainty and a slowing world economy—this upheaval is being registered in the very foundations of the global financial system.
Its clearest expression is in the bond markets, where governments raise money to finance their budget deficits and where debt is traded. It is most pronounced in the $29 trillion US Treasury market—one of the foundations of the global financial system—but is present in the bond markets of all the major economies.
This week, the Financial Times (FT) published an article noting that investors were “fleeing long-term US bonds at the swiftest rate since the height of the Covid-19 pandemic five years ago as America’s…
