Global Bond Yields Surge on Iran War Inflation Risks
International bond markets faced heavy selling this week as traders priced in higher interest rates due to energy price spikes from the Iran war. Benchmark yields in the U.S., Europe, and Japan reached multi-month or record highs as central banks shift away from previous expectations of rate cuts.
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Global bond yields surged on May 15 as 10-year G7 debt rose an average 17 bps this week following energy-driven inflation shocks. Benchmark United States 10-year Treasury notes hit 4.54%, their highest level since last June. Investors now price a 60% chance of a Federal Reserve rate hike this year, abandoning previous expectations for cuts.
