Oil Price Surge Triggers Global Bond Selloff as Inflation Fears Rise

The global bond selloff deepened as oil prices surged, reigniting inflation fears and prompting renewed speculation about an imminent Federal Reserve rate increase.

US Treasury Secretary Scott Bessent met with Bank of Japan Governor Kazuo Ueda and Japanese Finance Minister Satsuki Katayama on November 30 and 31, respectively, to discuss interest rates. Bessent called for interest rate increases during the meetings.

The US Treasury Department has attempted to stabilize yields through intervention in the yen-dollar market, larger bond buybacks, and signals of a potential rate hike by the Bank of Japan, but these efforts have been unsuccessful so far.