Global bond market posts worst quarter since late 2024 as yields spike amid $100+ oil and inflation fears
Government bonds declined over 2% since June as oil hovered near $100/barrel. US 30-year Treasuries reached ~5.6% (2002 levels), UK 30-year gilts hit 6%+ for first time since 1998, and French 10-year yields surged as central banks signal higher-for-longer rates.
TLDR
Rising bond yields signal higher borrowing costs for governments and corporations, threatening growth. The sell-off creates spillover risks to equities and portfolios. UK faces budget pressures from elevated gilt yields. Volatility-control funds with extreme equity exposures could trigger massive selling if yields climb further, amplifying downturns. Oil supply disruptions from the ongoing Iran conflict underscore war-related uncertainty sustaining inflation.
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