A short fuse on long bonds

A short fuse on long bonds

Key points: Though most central banks continued to lower short-term rates over the first half of the year, longer-term sovereign bond yields defied rate cuts to move higher. While there are numerous reasons long-term bond yields are shifting higher, sovereign debt levels and risks, particularly in the U.S., the UK, and Japan, are increasingly becoming drivers. Though a risk, we continue to believe deteriorating economic fundamentals will be the…