Global Bond Selloff Deepens as Investors Demand Higher Term Premium

Ten-year government bond yields are surging across developed markets, with US and UK yields near 5.2%, France approaching 5%, and Japanese yields also moving higher.
Oil helped trigger the latest move, but rising sovereign debt is adding structural pressure. San Francisco Fed analysis indicates that the term premium, the additional yield investors demand for holding longer-term bonds, is increasing beyond what changes in short-term rates alone can explain.
Government debt stands at roughly 122% of GDP in the US, 113% in France, 149% in Italy and around 200% in Japan. As investors demand greater compensation for financing persistent deficits, heavily indebted governments face increasingly expensive borrowing costs.