PICTURES ARE A THOUSAND TIME MORE TELLING THAN WORDS !!
As can be seen from the US 30 year Treasury and the German 30 Year Bund yields graphs below, Bond yields have fallen to extremes and maintained artificially low in the past few years by the interventions of Central banks buying bonds to fight deflation.
But as can be seen form the table above, in the last year, inflation rates have gone up sharply over the past and the past two years and this rise has not been taken into account by the markets that are still focusing on the 2 % target set by most central banks.
And despite the fact that we are actually very close to this target, the general consensus believes that it will stop there, something that is completely in contradiction with economic history.
Bond markets will wake up one day with the realization that inflation is here and here to stay and that it will inevitably overshoot the Central Banks target of 2 %, forcing them to raise rates much faster and push stronger than anyone believes at the moment.
Add to that the need for central banks to start offloading their own massive portfolio of bonds and the markets are in for a sharp and severe repricing of interest rates expectations and therefore of the bond markets.