Why the bond market is acting like it did before the Great Recession

Normally quiet, the bond market can occasionally send warning signals loud enough to hit stock markets worldwide and even grab the attention of U.S. presidents and other world leaders.

After the bond market’s alarm bells rose in volume through the summer, the Trump administration announced on Wednesday a move that could help calm it down. The U.S. Treasury Department said it will more than double the amount of U.S. government bonds that it will buy back, and the move worked in getting longer-term yields lower, for now at least.

Yields worldwide had earlier climbed to heights not reached in years and, in some cases, decades, because of the jump in oil prices due to the war with Iran, worries about big and growing debts for governments and other concerns.

The stakes are high because high yields drag on economies and bring downward pressure on stock markets after Wall Street hit records on excitement about big corporate profits and the promise of artificial-intelligence technology.

But what’s to come is still uncertain, and some analysts warn the Treasury Department’s move could even ultimately backfire.

Here’s a look at what’s going on and how things got this way:

Bond yields have been rising

In the United States, the centerpiece of the bond market recently touched its highest yield in more than a year. The 10-year Treasury yield, which shows how much interest investors want the U.S. government to pay them before they’ll lend it money for a decade, topped 4.70%, before falling back to 4.65% Wednesday.

That’s up from just 3.97% before the Iran war began in late February, and it’s a significant move for the bond market.

More notably, the 30-year U.S. Treasury yield has........

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