Treasury Yields Surge to Financial Crisis Highs as Markets Brace for Aggressive Rate Hikes to Tame Inflation

Long-term Treasury yields pushed to highs not seen since the global financial crisis, as markets price in higher interest rates for longer to combat inflation.

Factors driving the bond sell-off include expectations of more aggressive rate hikes, resilient economic data, and traders quickly unwinding positions betting on a bond rally.

With U.S. debt at record levels, some worry there may not be enough demand from funds and foreign buyers to absorb all the new supply.

The spike in yields tightens financial conditions, which could slow growth and potentially lead to a recession.

Many investors were positioned for yields to fall, exacerbating the selloff as they scramble to reduce duration risk exposure.