Financial Times FT.com

Bond turmoil raises rate rise fears

By Michael Mackenzie and Richard Beales in New York and Joanna Chung in London

Published: June 7 2007 19:46 | Last updated: June 7 2007 22:34

The benign credit conditions that have helped fuel the global buyout boom came under threat on Thursday as the yield on 10-year US government bonds registered its biggest daily jump in years.

Some analysts suggested the dramatic rise in yields could herald a sustained period of higher interest rates, increasing the cost of borrowing for companies, deflating borrower-friendly credit markets and eventually crimping the outlook for equity markets.

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