Rates again higher and why is it happening?/Other

Having very close friends in LA who left their home yesterday not knowing if it would be there when they came back, my heart and prayers go out to those living in the area, especially those who lost their houses.

With market interest rates continuing to rise in many parts of the world with today seeing another jump in UK gilt yields in particular with its 10 yr jumping by 12 bps to 4.80%, the highest since 2008, everyone has their own theory and/or questions on why this is happening. I think it's all of the above in that rates are rising because the world is now flooded with too much sovereign bond supply and that the laws of supply and demand now matter for those countries that have excessive debt, which means many. Rates are now rising because we're seeing the unwind of the largest financial bubble in the history of bubbles that took place in sovereign bonds that culminated in $18 trillion dollars of negative yielding securities in December 2020. Rates are rising because maybe central banks (outside of the BoJ) are likely going to slow the pace of rate cuts from here because of still inflation above their targets.

I will again also point to the Japanese, the BoJ and the JGB market as a reason for the rise in rates there and elsewhere. I believe it was the BoJ ending yield curve control in July 2024 as the catalyst for the rise in the US 10 yr yield to 5%. Now, we have a likely rate hike this month from the BoJ and each and every quarter stretching out to Q1 of 2026, the BoJ is slowing its bond buying by 400 billion yen per quarter and will eventually cut in half the amount they are buying by then. That liquidity spigot is turning down big time.

By the way, back to the UK, even with the continued rise in yields, the pound continues to weaken and this market response is something you usually see historically in emerging markets. It's also a big thumbs down on the new Starmer government.