Bond Yields Soar as Diesel Export Ban Looms
The global economy is facing renewed inflation fears as government bond yields spiked to fresh 19-year highs. The rise in bond yields was triggered by the prospect of a US ban on diesel exports, which stoked energy supply concerns and fueled inflation worries.
The yield on 10-year treasuries jumped 14 basis points to 5.11% at 7am in Auckland, its highest level since 2007. This marked a significant increase from yesterday's levels, as investors demanded higher yields amid rising energy costs and inflation fears.
Fed governor Michael Barr stated that the central bank would likely hike its federal funds rate next month to combat inflation. The kiwi dollar tumbled against a stronger greenback as a result, falling to 56.74 US cents from 57.02 cents yesterday.