Core Viewpoint - The rise in long-term bond yields across major economies, including the US, Japan, and Europe, is driven by concerns over fiscal instability and inflation, leading to potential economic slowdown and market volatility [1][3][6]. Group 1: Bond Market Trends - On May 21, the yield on the US 30-year Treasury bond rose to nearly 5.1%, the highest level in 1.5 years, with an increase of over 0.4% since the beginning of May [3]. - The rise in yields is not limited to the US; the UK 30-year bond yield reached 5.5%, and Germany's rose to approximately 3.1% [3]. - Japan's newly issued 30-year and 40-year bonds also hit historical highs, reflecting a broader trend of increasing long-term interest rates [3][6]. Group 2: Economic Indicators and Inflation - Concerns over inflation have intensified, with the US April employment data exceeding market expectations, leading to a belief that the Federal Reserve may only lower interest rates once this year [4]. - In the UK, the Consumer Price Index rose by 3.5% year-on-year in April, the highest in 15 months, prompting discussions about the pace of future interest rate cuts by the Bank of England [5]. Group 3: Fiscal Instability - The US Congress is coordinating fiscal legislation that could lead to a significant deterioration in fiscal health, with estimates suggesting a potential increase in public debt by $3 trillion to $5 trillion over the next decade [6]. - Japan is also experiencing fiscal expansion discussions ahead of the summer elections, with proposals for tax cuts [6]. - The perception of fiscal instability is contributing to rising interest rates, as investors express concerns over the sustainability of government debt [6][7]. Group 4: Impact on Investment and Financial Markets - The increase in long-term interest rates poses challenges for investments reliant on long-term borrowing, such as housing, with the 30-year mortgage rate rising to 6.92% [8]. - High interest rates may lead to increased bankruptcies among heavily indebted companies and could impact financial institutions holding significant amounts of US Treasuries [8].