Global Bonds Erase 2026 Gains as War Fuels Inflation Angst

Group 1 - Global bonds have lost their year-to-date gains due to rising oil prices, which have raised concerns about a resurgence of inflation, leading to a selloff in fixed-income markets [1][2] - The Bloomberg Global Aggregate Index, which measures total returns from investment-grade government and corporate bonds, is currently flat for 2026 after previously being up 2.1% this year [2] - US Treasury yields have reached multi-month highs as investors anticipate the risk of a broader conflict, with many expecting inflationary pressures to outweigh the typical safe-haven appeal of sovereign bonds [3] Group 2 - Concerns about inflation are growing among investors, particularly due to rising energy prices, which may significantly impact economies that are major energy importers, such as the UK and Europe [4] - In Europe, Germany's 10-year bund yield has risen to its highest level since 2023, reflecting fears about the economic fallout from the Middle Eastern conflict [5] - Goldman Sachs economists have revised their forecast for the Federal Reserve to cut rates, now expecting it to occur in September instead of June, due to a higher inflation trajectory [6]