‘Very big structural forces’ pushing bond markets to the brink and interest rates higher

Inflation in Australia and across the globe is not falling as hoped and it’s raising serious concerns for the economy and asset prices. If inflation remains stubbornly elevated, interest rates will need to either rise or at least stay uncomfortably high for borrowers. If they rise, asset prices, including property and shares, will have nowhere to go but down and the Australian economy risks falling into a recession. We already have a window into this world, via the bond market, and it’s looking rather dark. The bond market measures how much risk is attached to an IOU. The higher the…