Bond Market Inflation No Longer Ignored: High Yields May Be Permanent

Yields are rising in the US and global bond markets. While tensions with Iran and oil prices increase inflation expectations, stocks are affected...

Scraper SystemMay 21, 2026, 03:50 PM

Bond Market Inflation No Longer Ignored: High Yields May Be Permanent

There has been notable activity recently in the US and global bond markets. The conflict starting with Iran and tensions in the Gulf have kept global oil prices around $110, which is pushing inflation expectations higher. The US 10-year Treasury yield reached 4.67, hitting the highest point in a year, while 30-year bonds saw their highest yields since 2007. This rise caused about a 2% drop in stocks. UBS Wealth Management chief economist Paul Donovan states that the bond market carries concerns about the Iran war and that this could affect inflation and budget deficits. Goldman Sachs emphasizes that the negative correlation between US stocks and 10-year bond yields is at its strongest level since the 1990s. The Federal Reserve Bank of Philadelphia's survey shows expectations of slower growth and faster inflation for the coming year. This indicates that rising yields in the bond market will continue. ING research region head Padhraic Garvery says there is a possibility of testing 4.75 and even 5 levels in the 10-year bond yield. Meanwhile, Ed Yardeni from Yardeni Research believes this rise is due to short-term inflation and that the economy will maintain its resilience. The activity in the bond market may put pressure on stocks but also offers new opportunities for market players. In the coming period, the impact of inflation and geopolitical developments on bond yields will be closely monitored.