The Hidden Threat of Worldwide Debt

Revisiting Long-Term Government Bond Yields

Several months back, I discussed the concerning trend of rising long-term government bond yields, which have diverged significantly from their short-term counterparts. My main point was that expectations of central bank rate reductions can cause the 10-year yield to fall in line with shorter-term rates. Therefore, to gain a more accurate understanding of the underlying dynamics, it’s helpful to examine the projected 10-year yield a decade or two into the future.

In this update, I revisit the original charts that compared the current 10-year yield with its 20-year forward equivalent across major developed nations. This approach offers a clearer view of the broader trends at play.