Huge financing is required for wars. World War II was the largest-scale war in human history. Therefore, the large borrowing should have led to a rise in bond yields. Amazingly, bond yields dropped during World War II! See the chart below.
This is most puzzling. What were the conditions and events then that led to the anomaly?
Another interesting development was that one of the greatest bear bond market followed after the end of World War II. The bear market ended with 15% yield, killed by Paul Volcker in the early 1980s.