Investors’ fear of central bank errors reflected in short-term bonds
Investors have shifted from betting on reflation to fretting about stagflation — or at least a combination of higher inflation and lower economic growth that puts central banks in an awkward spot.
London/New York | The focal point of the global drop in government bond prices has shifted to short-term debt as high inflation spooks investors, who worry that a response from central banks could knock the economic recovery off course.
A surge in global energy prices is sharpening inflationary pressures, leading investors to bet that central bankers will back away from their insistence that inflation is transitory and instead react with higher interest rates.
