When growth raises the cost of money

For much of this year, strong earnings have helped equity markets absorb the prospect of higher interest rates. The economy has remained resilient, and companies have continued to deliver. Over recent weeks, however, bond markets have become harder to ignore. The return investors demand above inflation has risen sharply, increasing the cost of financing everything from government spending to the infrastructure behind artificial intelligence. The US ten-year real yield reached 2.94% on 5 October, its highest level since November 2008 and almost a percentage point above where it began the ...