Bond Yields Soar, Spiking Fed Rate Hike Bets

The U.S. bond market is undergoing a major repricing as Treasury yields reach multi-decade highs, fueled by persistent inflation, hawkish Federal Reserve rhetoric, and weak demand at recent debt auctions. With 10-year real yields climbing to 2.8%—levels not seen since 2008—investors are adjusting to a structurally higher cost of capital. Market experts, including Bloomberg’s Chief U.S. Economist Anna Wong and portfolio managers from Parametric and Citi, emphasize that while the transition to a higher-rate era creates volatility, it also offers attractive income opportunities for fixed-income investors. Beyond macro trends, the discussion examines the record-setting $11.1 billion junk bond offering from SoftBank to fund AI ambitions and the deteriorating financial health of U.S. public school districts. Additionally, breaking news regarding a potential phased deal to reopen the Strait of Hormuz provides a temporary reprieve for short-term Treasury yields and equity markets.