Should we worry about the fiscal impact of higher bond yields?

On their own, the increases in government bond yields since May do not pose a significant threat to the public finances of most advanced economies. Higher yields in the secondary market take a long time to feed through to debt service costs. What’s more, the countries with the weakest fiscal positions (notably Japan and Italy) have generally experienced the smallest rise in yields. But further increases, especially where not justified by local fundamentals, could be increasingly damaging.