US and Europe Yields Rise as Markets Watch Inflation and War

Global bond markets are experiencing a significant sell-off as investors point to growing concerns about inflation, energy costs and the ongoing conflict with Iran.

US 10-year Treasury yields have climbed to their highest levels in around a year, with markets increasingly pricing in the possibility that the Federal Reserve will need to keep interest rates elevated for longer, or raise them further.

Higher yields are also pushing up the cost of mortgages and corporate loans while reducing the appeal of equities. Analysts warn that US stock markets have placed excessive faith in optimism around artificial intelligence in recent months, while overlooking rising energy prices and weakening economic fundamentals.

Tensions are also building in Europe and Japan, where investors are monitoring inflation, political risks and growing concerns about the sustainability of public finances. Markets appear to be bracing for a period of more expensive credit and slower growth.

(reuters)