Investors fear another surge in inflation

Illustration: Satoshi Kambayashi

May 19th 2026|4 min read

Convulsing bond markets mean different things to different people. If you run a government, it is plainly bad that governments’ borrowing costs are shooting up—as they are across the world. The yield on Japan’s 30-year debt has risen above 4%, its highest ever; America’s has topped 5%; Britain’s is chugging fitfully towards 6%. Since mortgage rates tend to move in line with these yields, anyone looking for a new one will also feel the pinch. For bond traders, in contrast, the past few weeks have been quite the thrill. A decade ago near-zero interest rates seemed to have permanently shoved their market into the deep freeze. Now it is red hot.