Bond yields are soaring again as the world comes to grips with what is proving to be a multi-year battle against elevated inflation pressures, which has long been our central case. This is threatening the valuations of all risky asset classes, including equities, venture capital, commercial real estate, junk bonds and private debt.

Some might recall that earlier this year, bond markets were pricing as much as 100 basis points of interest rate cuts from the US Federal Reserve this year, which we argued was a preposterous presumption. These cuts were subsequently shifted into next year and lent some weight by the Fed projecting that it would ease its policy rate by precisely this quantum next year.