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Global Bond Selloff Intensifies as Rate Pressures Mount Worldwide

Bond markets are experiencing significant stress as interest rates climb across all major economies. Harvard economist Gita Gopinath, who previously served as first deputy managing director of the International Monetary Fund, has consistently flagged concerns about the sector's vulnerability. She points to three interconnected factors driving inflationary pressures globally: shifting demographic trends, elevated government debt levels, and substantial capital requirements for emerging technology sectors. The combination creates mounting upward pressure on borrowing costs. Market observers are grappling with a widening disconnect between equity and bond performance, raising questions about investor assumptions regarding government intervention during future crises. Gopinath's analysis suggests policymakers may face constraints in responding to major economic shocks, potentially limiting the government backstop investors have traditionally relied upon during downturns.