The Global Bond Reset | The Bond Vigilante Frame Returns From UK to Tokyo

Real yields break out, energy inflation hardens, and the bond vigilante frame returns from the UK to Tokyo. What allocators should price in.

The May 16 sell-off across developed-market sovereigns is not a duration tantrum looking for a narrative. It is the bond market re-pricing two things at once: a supply-driven energy shock that the West Asia conflict is unlikely to resolve quickly, and fiscal trajectories that look increasingly exposed in a higher-real-rate regime. The combination is what gives this episode its character — rates are rising not because growth is accelerating, but because inflation is sticky and the marginal sovereign buyer is asking harder questions about issuance.

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