Iran Conflict Sparks Bond Market Selloff Amid Rising Interest Rates

A new wave of strikes in the Iran war has led to a surge in energy prices, causing bond markets around the world to selloff.

The increase in government borrowing costs, particularly on the economically sensitive 10-year benchmark rates, has ripped across global stock markets.

U.S. 10-year Treasury yields have hit their highest since 2023 at 4.8%, a level that could pose a challenge to equities for mixed-asset portfolio managers.

The Federal Reserve, European Central Bank, and Bank of Japan are all expected to raise interest rates this month, with centrist Fed board member Michael Barr indicating on Tuesday that a rate rise in September may now be necessary.