“Bond Yields Moving Higher”
20 August 2026
Market Mood
The quieter summer period has seen Equities continue to move higher into mid-August again making new highs whilst bond prices have fallen as yields (which move inversely to price) have increased. There are both short-term and long-term factors impacting bonds which are worth highlighting again. In the longer-term, governments have issued more debt particularly since the post-covid stimulus and this means that debt to GDP ratios are higher across the world and therefore investors are demanding higher coupons in the years ahead. In the shorter-term, the conflict in the Middle East is resulting in a higher oil price and therefore higher inflation which has remained persistently above the Federal Reserve’s 2% target even before the start of the conflict.