Global bond yields surged Monday as investors repriced inflation and geopolitical risks, with deVere Group warning the selloff threatens the equity market rally.
The benchmark 10 year United States Treasury yield climbed to 4.631 percent on Monday, its highest level since February 2025. The two year yield reached a 14 month high of 4.102 percent, while the 30 year yield rose to 5.159 percent, a one year peak.
Japanese government bonds faced parallel pressure. The 30 year Japanese yield crossed 4.2 percent for the first time on record. The 10 year yield hit levels last seen in 1996, following reports that Tokyo plans fresh debt issuance to fund emergency war related spending.
Nigel Green, chief executive of global financial advisory deVere Group, said investors are rethinking the foundations of the equity rally as government debt becomes competitive again.
“Bond markets are warning that inflation could prove much stickier than many investors anticipated,” Green said.
Years of cheap money and suppressed yields had pushed investors toward riskier assets. Government debt now offers attractive returns again, precisely as inflation pressures intensify across major economies.
Oil prices added fuel to the inflation outlook. Brent crude traded near 111 dollars a barrel after diplomatic efforts to end the Iran war stalled. Reports cited a drone strike targeting a nuclear facility in the United Arab Emirates (UAE).
Green identified energy shocks, tariffs, defence spending, labour shortages, and heavy artificial intelligence (AI) infrastructure investment as the main forces driving persistent global inflation.
Even without immediate rate hikes, investors are demanding higher compensation for inflation risk, fiscal deterioration, and geopolitical uncertainty. Sovereign borrowing levels are compounding the strain.
Japan’s expanded spending plans have heightened concerns about its public finances. The United States, United Kingdom, and several European economies continue issuing massive volumes of debt into markets already demanding higher yields.
Higher sovereign yields feed directly into broader financial conditions. Mortgage costs remain elevated, corporate refinancing has become more expensive, and equity valuations face greater scrutiny.
The stock market rally has concentrated in a small cluster of AI and technology companies, leaving broader markets exposed if yields continue climbing. Rising bond yields mechanically compress equity valuations by raising discount rates and offering investors a competitive alternative to stocks.
Green described the repricing as one of the defining investment stories of 2026, pointing to inflation fears, geopolitical conflict, rising debt issuance, and structurally higher yields. Fixed income is becoming genuinely competitive with equities again, and global investors are repositioning accordingly.
