QIC says bond sell-off signals shift to higher-for-longer interest rate regime
TLT•Bond sell-off signals higher-for-longer rates
QIC flagged a global bond sell-off, with US 10-year yields up about 20 bps this week to 4.96%, near 2007 highs.
US 30-year yields hit a 19-year high of 5.36%, despite efforts to limit the rise.
Inflation pressures and tighter policy expectations
Escalation in the Iran War lifted energy prices, with Brent at USD 108 a barrel, worsening the inflation outlook.
Markets priced more tightening, with a 70% chance of a Fed hike next week, while the ECB deposit rate rose to 2.5%.
Structural forces pointing to a higher real-rate regime
QIC pointed to structural upward pressure from AI capex, energy transition, defense spending, signaling a higher-for-longer real rate regime.
