Global Bond Selloff Deepens as Inflation and Debt Fears Mount

Global bond markets experienced a sharp selloff on Wednesday, pushing borrowing costs to multi-decade highs. This rout is attributed to growing investor concerns over inflation, escalating government debt levels, and rising energy prices stemming from the Middle East conflict. The yield on 10-year U.S. Treasury notes climbed to a near three-year high of 4.81%, while Japan's 10-year yield surpassed 3% for the first time in 30 years. German bund futures and French OAT futures also slipped to multi-year or record lows. The increase in corporate bond issuance for AI investments and government bond issuance due to fiscal deficits are also contributing to the pressure.