Finance

The bond market continues to put massive pressure on risk assets, with the 10-year Treasury yield surging past its 2007 peak to reach 5.304%, its highest mark since May 2002. Simultaneously, the 30-year bond yield remained highly elevated, climbing above 5.6%. This sharp multi-week sell-off in sovereign debt is being driven by strong domestic economic reports, persistent geopolitical tensions, and sticky inflation that has pushed back expectations for near-term interest rate cuts.

The latest August Personal Consumption Expenditures price index revealed that inflation slowed more than economists originally projected, rising 3.4% year-over-year compared to expectations of 3.7%. Despite this cooling indicator, robust private sector employment data and strong spring GDP growth mean that market participants are still pricing in high odds for another interest rate hike before the end of the year.

Crude oil prices fluctuated heavily as the market evaluated supply chain uncertainties stemming from ongoing military conflict with Iran. Brent crude rebounded up to approximately $98 per barrel amid constraints on shipping and critical refinery infrastructure damage. The persistent energy price premium continues to elevate core global inflation fears, reinforcing central bank tendencies to maintain restrictive monetary policies.