Fed Fallout Triggers Global Yield Spike as Tighter Policy Looms
- Central banks face pressure to hike on Fed, local inflation
- U.K. two-year rate hits 2011 high before Bank of England meets
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Bonds tumbled across the world on Thursday after Federal Reserve Chairman Jerome Powell’s latest hawkish pivot, with yields from Wellington to London breaching multi-year highs.
Expectations are growing that the Fed’s stance will spur more rapid tightening from central banks across the world. U.K. two-year yields surged to a decade-high, while New Zealand’s 10-year rate touched the highest in three years. German notes proved more resilient than Treasuries, sending the gap between U.S. two-year yields and equivalent German schatz to the widest since February 2020.