Zoom out from the short-term yield chart, however, and the picture looks a lot less bleak. The average cost of borrowing for a decade among the nations in the Group of Seven has more than tripled in the past year, rising to 1.2%. But that’s still way below the average since the start of 2000 of about 2.7%, and less than the 1.8% level seen as recently as 2018.
For any fixed-income traders nursing losses after being taken in by the central bank mantra that inflation would prove to be transitory, there’s little relief in sight as the guardians of financial stability look set to overshoot by draining the monetary punchbowl as rapidly as they can. For borrowers needing to tap the debt markets, there’s no time like the present.
Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.