A sharp sell-off in global government bonds is revealing investor anxiety that the macroeconomic backdrop may be shifting toward persistently higher inflation. Long-term bond yields have hit record levels: the U.S. 10-year yield reached its highest since November 2023, Japan’s 10-year yield crossed above 3% for the first time since 1996, and British and European yields climbed to multi-decade highs. This trend reflects investor demand for a higher term premium amid growing fiscal borrowing requirements, persistent inflation uncertainty and reduced central bank support. Brent crude oil reached $96.64 per barrel, while the odds of a Federal Reserve rate hike exceeded 66% following Chairman Kevin Warsh’s keynote speech at Jackson Hole.
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