Bond Traders See Shift Towards Higher Yields

A new era of elevated borrowing costs may be emerging as war-driven inflation concerns intensify in the US bond market, pushing 30-year Treasury yields toward a two-decade high above 5%, Bloomberg reported.

Group of Seven finance ministers are expected to discuss the bond market turmoil at an upcoming meeting.

US Treasuries extended losses in Asia after posting their worst weekly performance in a year, as renewed gains in oil prices added to inflation worries. Recent data suggesting accelerating inflation further pressured fixed-income markets globally, triggering selloffs in the UK and Japan.

Group of Seven finance ministers are expected to discuss the bond market turmoil at an upcoming meeting.

The Treasury selloff has also weighed on equity markets and shifted expectations for Federal Reserve policy.

Traders now see a higher probability of a rate hike by March, a sharp reversal from earlier expectations of rate cuts in 2026. Markets are pricing in roughly a 75% chance of a hike by December.