The world is witnessing a global sell-off in government bonds, pushing borrowing costs sharply higher and unnerving investors across major economies including the U.S., UK, Japan and Germany.

The sell-off has renewed concerns that central banks in some of the world’s biggest economies could come under pressure to raise interest rates or keep them higher for longer as rising oil prices fuel inflation.

Renewed fighting between the U.S. and Iran over the weekend pushed oil prices higher, with Brent crude rising above $90 a barrel and reaching about $92 on Tuesday. The increase has heightened fears that higher energy costs could reignite inflation and make it harder for central banks to cut interest rates.

In the U.S, the yield on the benchmark 10-year Treasury note climbed 4.79 per cent its highest level since January 2025. In the UK, the 10-year government bond yield crossed its highest level since 2008, while Germany’s 10-year bond yield rose to a level last seen around 15 years ago.

The Japanese bonds similarly rose to a historic high of three per cent, for the first time in three decades.