Global investor unease and rising inflation fears are being driven by US policy and geopolitical tensions, including Donald Trump’s economic plans and heightened confrontation with Iran, which are pushing bond yields higher worldwide.

Higher borrowing costs are translating into higher mortgage and loan rates, increased business costs, tighter fiscal space for governments, and potential growth slowdowns, with a real risk of a doom loop where debt costs hamper revenue and growth.

As US yields climb, other major economies—UK, Germany, France, and Japan—are seeing their debt yields rise toward multi-year or multi-decade highs, underscoring global dependence on US financial stability.

A broad bond-market sell-off is underway as long-term US yields push higher, with the 30-year Treasury above 5%, the strongest level since 2007, lifting government borrowing costs worldwide.

The outlook depends on the evolution of the Iran situation, possible shifts in US tax and spending policy, and central-bank actions, with some analysts warning of the risk of a US financial crisis if conditions worsen.

US efforts to stabilize markets—like expanding long-term bond purchases and coordinating with Japan to support the yen—have provided only temporary relief as yields rose again.

Political risk and policy uncertainty in the US and abroad—ranging from fiscal sustainability concerns under the Trump administration to questions about UK leadership and France’s 2027 election cycle—are fueling volatility in bond markets.

Inflation pressures, higher oil prices from the Iran conflict, and the prospect of tighter policy from major central banks are driving investor demand for higher yields and exiting the bond market.