Government borrowing costs rise after oil prices exceed $111 a barrel

Government borrowing costs rose across Europe, Japan, the UK, and the U.S. after oil prices moved above $111 a barrel. G7 bond yields reached multi-decade highs. The sell-off extended to developing economies, and stock markets declined.

Inflation and deficit pressures Inflationary pressure from the conflict and large government deficits are expected to keep yields elevated for the foreseeable future, according to Apollo's chief economist. Central banks have not raised interest rates, citing concerns over growth. Lenders have increased mortgage costs across Europe and North America in anticipation of future rate hikes.