Essentially, a lot of investors bought bonds at tremendously low interest rates because they believed an extended period of deflation could happen. What appear

Essentially, a lot of investors bought bonds at tremendously low interest rates because they believed an extended period of deflation could happen. What appears to be happening instead is inflation of the money supply. If you buy a bond that yields 1.00% and inflation is negative 1.00% (i.e. deflation) then your real yield is positive 2.00%. On the other hand if inflation is positive 1.00% then your real yield is 0.00%. As data is coming out is showing that inflation is occurring and not deflation, investors are selling their low yield bonds. This lowers the market price of the bonds and since a bond's yield moves inversely to its market price, it raises the yield. EDIT: mild inflation is really what you want with our monetary system, not deflation. So this is not a bad thing for the economy per se but some investors that bought low yield bonds will lose money or opportunity as interest rates rise.