What is the cause of excessive convexity?

Excessive convexity in a financial context typically refers to the pronounced curvature of the price-yield relationship for bonds or fixed-income securities. This phenomenon can occur due to factors such as low interest rates, which can amplify the sensitivity of bond prices to changes in interest rates, or due to increased demand for long-duration bonds. Additionally, market conditions, such as heightened volatility or shifts in investor sentiment, can also contribute to excessive convexity.