Why bonds are the most important market in the world

The bond market is growing more interesting lately — and that's concerning.

Why it matters: The $160 trillion global bond market is like the plumbing in your house.

You don't think about it until it stops working and you've got a nasty situation on your hands.

The big picture: Long-term government bond yields for the U.S. and other G7 countries have been climbing — hovering at levels last seen in 2007 before the financial crisis — and raising concerns about borrowing costs growing more expensive for countries that are already staring down heavy debt loads.

The AI boom, meanwhile, has spread to the market for corporate bonds, sparking worries about a bubble.

What to watch: It's a perfect moment to release a book laying out the history of the bond market: "A Fabulous Debt: The Epic Story of How Bonds Built the Modern World" by Robin Wigglesworth is out on Sept.

29.

Catch up quick: In the book, Wigglesworth reminds us that some of the biggest financial messes of the past 50 years were bond blowups.

In 2020, the market for U.S.

Treasurys seized up in the early days of the pandemic, leading to an unprecedented rescue from the Federal Reserve.

The global financial crisis grew out of the collapse in mortgage-backed bonds and securities.

A mania for railroad bonds triggered the Panic of 1873, which was dubbed the Great Depression — until the 1930s claimed the name.

Where it stands: Axios recently caught up with Wigglesworth.

Here's a snippet of our conversation, which has been edited and condensed for clarity.