Global Bond Markets Plummet Under Pressure from Inflation Worries

Long-term borrowing costs from the United States to Japan and Germany have hit their highest levels in decades, as renewed inflation worries add to nagging concerns about fiscal pressures facing some of the world's biggest economies.

The U.S. thirty-year bond yields rose to their highest since 2007, with oil prices up 50% so far this year rising back above $90 a barrel and fanning inflation worries following fading hopes for a U.S.-Iran peace deal.

In Japan, inflation angst pushed 10-year borrowing costs to a three-decade high just under 3%, while in Europe, Germany's 10-year Bund yield touched its highest since 2011, French yields were at their highest since 2009, and Britain's 30-year borrowing costs neared peaks hit in May.

Kjersti Haugland, chief economist at investment bank DNB Carnegie, warned that bond markets are entering an era where inflation and rates outlook is more uncertain, leaving behind the post-financial crisis period of low rates and subdued inflation.