September Storm Brews as Global Bond Markets Come Under Pressure

As September begins, global markets are bracing for another government bond storm. The Federal Reserve's hawkish tone after Jackson Hole has sent U.S. Treasury yields soaring, with the benchmark 10-year borrowing rate hitting its highest since President Donald Trump took office in January last year.

The rising 10-year yield will have significant ripple effects across the economy, impacting mortgage rates and other business and consumer loans. With little change expected on the inflation front before the Fed's next meeting later this month, futures markets now see a two-thirds chance of a rate rise then.

Adding to the pressure is a jump higher in world crude oil prices this week on the resumption of military exchanges in the Iran war. The Bank of Japan and European Central Bank are also likely to raise interest rates this month, further agitating bond markets.