The war in Ukraine has understandably captured markets but eventually the focus will shift back to the deteriorating inflation picture.
That's happening today in the bond market as long-end yields push higher. The ECB took a more hawkish stance today and there's a risk the Fed does the same. There's also very good reason to expect more government spending in the years ahead along with less help from central banks to pay for it.
All that adds up to a terrible situation for bonds. That's unfolding today with US 30-year yields breaking above the February high and rising 8 bps. The short end is also pushing to new post-pandemic highs as the safety bid quickly unravels.
