Overview
- Renewed U.S. strikes on Iranian targets and Iranian retaliatory attacks on Tuesday pushed Brent crude above $90–$95 a barrel by early September, reviving fears of sustained supply disruption through the Strait of Hormuz.
- Global government bond yields jumped to multi‑decade highs, with the U.S. 10‑year Treasury near 4.79–4.80% and Japan, Germany and U.K. 10‑year yields hitting levels not seen in decades.
- Federal Reserve Chair Kevin Warsh’s hawkish Jackson Hole remarks and comments from Fed Governor Michael Barr have lifted market pricing for a September 25bp hike to roughly 65–70 percent probability.
- Equities fell, led by long‑duration and technology names, and higher yields are already pushing up consumer and corporate borrowing costs such as mortgages and refinancing rates.
- Policy and fiscal pressures remain key risks: Treasury buybacks have provided only temporary relief, heavy corporate issuance and a $40 trillion U.S. debt load could keep term premia elevated as upcoming jobs and inflation data and the Sept. 15–16 Fed meeting will determine the next move.