Global Rates Outpace Fed Hike Expectations, Threaten Bond Markets

Global interest rates are rising faster than expected, posing a bigger threat to bonds than the Federal Reserve's potential rate hike.

According to Bloomberg's swap market tracking, two-thirds of the 32 markets monitored are priced for rate hikes over the next year. Japan, Canada, the euro zone, and the UK are among those with rising borrowing costs, while South Korea is leading the pack at more than 100 basis points.

The rapid increase in rates has sparked concerns about the impact on bonds. As investors await the Fed's decision, market expectations for further tightening are building around the world.