Government borrowing costs in the US and Europe have surged as investors become more optimistic that the developed world has embarked on a period of sustained, rapid growth and anticipate central banks raising interest rates earlier than had been previously expected.
Yields on sovereign debt, which move inversely to prices, broke above key levels in Europe and the US, even after Mario Draghi, the European Central Bank president, warned of the fragility of the eurozone’s nascent economic recovery.
Investor confidence on growth in advanced economies contrasted with turmoil in the developing world, where borrowing costs rose to the highest since October 2011 on worries that the tapering of US monetary stimulus would exacerbate sluggish economic growth.