Global Bond Selloff Pushes Yields Higher, Fed Hikes Rates

A global bond selloff, fueled by rising oil prices, persistent inflation concerns and heavy government and corporate borrowing, briefly pushed the U.S. 10-year Treasury yield above 5% for the first time since 2023 before it retreated toward 4.99%. The Federal Reserve raised its benchmark rate by 25 basis points to 3.75%-4%, its first increase since 2023, and signaled that further tightening could be needed. Higher yields pressured long-duration bond funds, global debt markets and potentially richly valued equities, while raising concerns about economic growth and complicating central-bank policy; elevated borrowing costs were also reported in the United Kingdom, Australia and Canada. In Canada, lenders raised some fixed mortgage rates as five-year government bond yields climbed. Indian 10-year government bond yields rose amid higher inflation, oil-price concerns and expectations of possible Reserve Bank of India tightening, with analysts saying the yield could test 7.25%, although Axis AMC's Naveen Kulkarni forecast about 17% Nifty earnings growth in fiscal 2027 and said a 50-basis-point rate increase would not seriously undermine estimates. China remained an outlier with low yields and accommodative policy amid prolonged deflationary pressures, while some analysts argued that temporary oil-price increases may not create sustained inflation.