Global bond selloff deepens as oil shock drives yields higher

Global government bonds fell May 15, 2026, as rising oil prices and the U.S.-Iran conflict intensified inflation concerns, pushing investors to price in tighter monetary policy from major central banks. The selloff hit long-dated debt hardest. The U.S. 10-year Treasury yield rose 10 basis points to 4.58%, its highest level in a year. Japan’s 30-year yield reached 4% for the first time since issuance began in 1999, while the U.K. 30-year gilt yield hit a 28-year high. Germany, Spain, Australia and New Zealand also saw yields rise. Crude prices climbed as the conflict disrupted shipments through the Strait of Hormuz, adding to pressure after U.S. consumer and producer inflation reports came in hotter than expected. Traders now see an almost two-thirds chance the Federal Reserve raises rates in December 2026. U.K. swaps markets also shifted toward pricing at least two Bank of England rate increases by the end of 2026, while Japanese yields rose on renewed fiscal concerns.