world-economy

Central Banks Face Pressure as Global Bond Yields Spike on Inflation Concerns

Major central banks will need to respond if inflation expectations continue climbing, as surging global bond yields threaten broader financial market instability, according to Pacific Investment Management Co.'s leadership.

The 10-year Treasury yield reached its highest level in a year, while Japan's 30-year sovereign bond yield hit record highs Monday amid persistent inflation worries and concerns over government spending. Government bond markets tumbled around the world, with 30-year Treasuries touching levels not seen since 2007.

Pimco identified opportunities in Japan's longer-dated bonds despite the yield surge. The sharp rise in borrowing costs weighed on equity markets, particularly technology stocks, as investors reassessed valuations in a higher-rate environment. War-related inflation risks contributed to the broad-based selloff across asset classes.