Global Bonds Sink as Middle East War Stokes Inflation Risk
The aftermath of Israeli and U.S. airstrikes is seen at Nilufar Square in Tehran on March 2.
Photographer: Fatemeh Bahrami/Anadolu via Getty Images
The US-Israeli war on Iran is rekindling inflation concerns across financial markets, sapping the outlook for global bonds that had just posted their best start to a year since the pandemic.
Traders from Sydney to London to New York have offloaded government debt since Monday as they game-plan how a prolonged conflict in the Middle East may ramp up oil and supercharge inflation. Those concerns are eroding the haven appeal of fixed-income assets, with sovereign debt around the world posting losses this week.