This year’s hawkish policy shift by central banks has come close to ending the era of negative-yielding debt, with the number of bonds yielding below zero globally falling by $11 trillion.

Bond prices have tumbled this year as central banks end large-scale asset purchases and raise interest rates in their fight against soaring inflation, pushing yields in many large economies to their highest levels in years.

As a result, yields on $2.7 trillion worth of bonds are now below zero, the lowest level since 2015 and up from more than 14 in mid-December, according to the Bloomberg Global Bond Aggregate Index, a broad measure. Trillion dollars fell sharply in fixed income markets. The complete elimination of negative yields would mark a return to normalcy for the vast majority of big investors.

“Central banks have been slow to catch up with this inflation shock, so bond markets are suddenly pricing in a huge shift in interest rates,” said Mike Riddell, senior portfolio manager at Allianz Global Investors.

Negative yields, once considered unthinkable, were later seen as a novelty and later an established feature of global markets. They mean debt prices are so high and interest payments so low that if investors hold the bond to maturity, they are sure to lose money. They reflect a belief that central banks are keeping interest rates at rock-bottom levels and have been ingrained in Japan and the euro zone’s massive debt in recent years.

That assessment has changed dramatically in recent months, especially in the euro zone, where the European Central Bank on Thursday reiterated plans to end its bond-buying program this year, with traders betting that rates will return to zero for the first time since 2014. December.

Riddell said the end of ultra-low or negative yields would be a “double-edged sword” for bond investors. “On the one hand, people are nursing the losses on the bonds they hold. But on the other hand, positive risk-free rates mean future returns may look better.” He added that for pension funds, etc., which require large holdings by the government That would be “good news” for investors in safe assets such as bonds but still need to earn enough returns to cover future spending.

Salman Ahmed, global head of macro at Fidelity International, said the dwindling stock of negative-yielding bonds also reflects high levels of inflation, prompting investors to demand greater compensation for rising prices.

“Yes, nominal yields are rising, but long-term investors should really care about real returns. What matters is what’s left after inflation, which is very high right now,” he said.

The euro zone has been the main driver behind the decline in debt transactions with sub-zero yields. In December, the euro area held more than $7 trillion in such bonds, including all German government bonds. That figure has dropped to just $400 billion. The Bank of Japan has so far resisted a global shift to tighter monetary policy and now accounts for more than 80% of global negative-yielding bonds.

Negative yields in the euro zone are likely to multiply again unless the ECB offers a rate hike that has already been priced in by the market. Ahmed said that given the threat to the region’s recovery from Russia’s invasion of Ukraine and the resulting rise in energy prices, the central bank would struggle to significantly raise interest rates from the current level of minus 0.5 percent.

“I think the ECB has missed the window of policy normalization, as the growth shock from Ukraine will be more severe in Europe,” he added. “In our view, they’re not going back to zero this year, which means negative-yielding bonds aren’t going away.”