Bond Market Selloff Pushes Borrowing Costs to Highest Levels in Years

The global bond market is experiencing a selloff, pushing borrowing costs to their highest levels in years. The war in the Middle East has driven up energy prices, lifted inflation expectations, and led traders to anticipate more rate hikes.

In the US, the Federal Reserve's upcoming decision on interest rates could be influenced by inflation data, with producer price reports due Thursday and consumer price index data a day later. Economists expect August CPI to have risen 0.4%, potentially leading to a rate hike.

The European Central Bank is also set to raise rates by another 25 basis points on Thursday, despite inflation surpassing 3% due to rising energy prices.