Coronavirus recovery: why stimulus-driven inflation is not the biggest threat to markets

Another week, another sign that government bond markets are becoming increasingly concerned about the return of a long-dormant foe: inflation. At one point on Tuesday, the closely watched yield on the benchmark 10-year US Treasury bond was approaching 1.8 per cent. That was its highest level since January 2020, just before the Covid-19 pandemic erupted, and up from less than 1 per cent as recently as early January.US government bonds have suffered their biggest quarterly loss since the…

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