Global Bond Yields: The Kettle Is Whistling

Global bond yields are surging as markets reprice inflation and geopolitical risks following military strikes in Iran and worsening fiscal deficits in developed markets.

Key Takeaways

• 1.Developed-market bond yields are repricing due to a combination of inflation risk, fiscal credibility concerns, and geopolitical shocks.
• 2.The US-led strikes on Iran in February 2026 served as a dominant driver, shifting market expectations from rate cuts to potential hikes.
• 3.Repricing is a global phenomenon affecting the US, ECB, UK, and Japan, with investors demanding higher compensation for fiscal deterioration and issuance supply.

Table of Contents

• Markets
• Exhibit 1: History of "Peak" and "Trough" Policy Rate Pricing
• Exhibit 2: The Multi-Decade Path of 30-Year DM Bond Yields

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