Global sovereign bond yields reached their highest level since the 2008 financial crisis, with the Bloomberg gauge of global government bond yields hitting 3.72% on September 1. The selloff affected every major economy: US 10-year Treasury yields climbed to roughly 4.79%, UK gilts to approximately 5.234%, Japan crossed 3% for the first time since 1996, and German Bunds touched around 3.34%. Two main factors explain this surge: rising oil prices driven by escalating US-Iran tensions around the Strait of Hormuz, and the Federal Reserve’s hawkish stance at the Jackson Hole symposium signaling further rate increases. Markets are now pricing in a 65-74% probability of a Fed rate hike as early as September 2026. This situation could also force Japanese institutions to repatriate capital from overseas markets, adding selling pressure to US and European bonds.
Source: Read the original article
