Richard Baldwin: Bond yield surge raises questions about timing and political impact

Richard Baldwin: Bond yield surge raises questions about timing and political impact
Bond yields rise as deficits persist

Richard Baldwin highlights recent commentary from Greg Ip on bond markets. He points out that the key question is not why yields increased significantly in the past week, but why this move did not occur earlier.

Baldwin also relays the view that with the rise of populist movements on both the left and right, prospects for meaningful deficit reduction efforts are becoming increasingly unlikely.

Baldwin previously relayed Martin Wolf’s warning that the rise of populism could increase the risk of a financial crisis, citing possible impacts on global economic policy in a recent article. In a separate note, he observed that aggregate demand from data centres has now surpassed U.S. single family home construction, driven by AI-related activity, according to his analysis earlier this year. These observations provide context to ongoing discussions around macroeconomic and fiscal trends.

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