🔥Breakdown in US-Iran talks boosts inflation expectations: rate-cut bets pushed back, global bond markets under pressure

On April 13, the collapse of negotiations between the United States and Iran, combined with the potential blockade risk in the Strait of Hormuz, sparked market concerns about rising energy prices and a pickup in inflation. This further weakened market expectations that the Federal Reserve will cut rates within the year. At present, traders have pushed back the timing of the next rate cut to mid-2027. The latest data shows that the US CPI for March rose 0.9% month-over-month, the largest increase since 2022, driving the 10-year US Treasury yield to rise to above 4.3% and further climb to about 4.35% in the latest trading day. Meanwhile, Japan’s 10-year government bond yield rose to the highest level since 1997, and bond yields in Australia and New Zealand also moved higher in sync, putting overall pressure on global bond markets. Institutional views generally believe that rising energy prices are increasingly contributing to 「supply-side inflation…