The U.S. 10-year Treasury bond yield surpassed 5% for the first time since 2007 on the 19th. This milestone holds significance in the global bond market, reflecting mounting concerns over inflation rates and the economic outlook in the United States.

Jerome Powell, Chair of the Federal Reserve, expressed worries in a recent speech about the persistently high inflation rates. He cautioned that this situation might endure longer than anticipated, emphasizing the need for sustained economic growth and labor market adjustments to stabilize inflation.

The robust consumer spending in the United States is elevating expectations for an economic soft landing, leading to an upward trend in bond yields. According to the U.S. Commerce Department, retail sales in September surpassed expert predictions by a significant margin, marking a substantial increase.

Despite the recent increase in bond yields, the BlackRock Investment Institute predicts further upward pressure on long-term bonds due to heightened demand from investors.

This surge in bond yields is causing unexpected turbulence in the global bond market, signaling increased uncertainty ahead for both the U.S. and global economies.

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