Stock-market investors are turning jittery over something which has apparently happened only two times in the bond market since the early 1980s: The 10-year Treasury yield has jumped by about as much as the Federal Reserve has cut interest rates over the same period of time.

Japanese bond yields are climbing. Things are particularly extreme in Britain, where gilt yields recently reached almost 5%, their highest since 2008 (see chart 1). Rising yields are bad news for governments,

U.S. Treasury yields retreated from an eight-month high on Thursday while the dollar strengthened against major currencies, as investors reevaluated the Federal Reserve's interest rate policy for 2025 as the U.S. economy shows signs of resilience.

So much for a rerun of the 2016 post-election U.S. stock market rally. The S&P 500 index is clinging to a gain of just 0.8% since Election Day on Nov. 5, threatening to erase the “Trump bump” investors attributed to Donald Trump’s victory.

In the US, the Treasury market has been hit by concerns that president-elect Donald Trump will borrow freely and cut taxes. Driving these moves are government bond investors who are once again taking up the role of enforcers of fiscal discipline,