Global Bond Yields React to Inflation Expectations

U.S. Treasury yields have risen significantly, with the two-year yield reaching 4.34% and the ten-year yield at 4.40%, due to expectations of higher Consumer Price Inflation and potential economic policies of President-elect Donald Trump, including tax cuts and tariffs. These anticipated policies are fueling concerns about inflation, which could impact Federal Reserve interest rate decisions. Minneapolis Fed President Neel Kashkari noted the U.S. economy's strength but highlighted that the Fed is still working to control inflation. Meanwhile, Indian government bond yields ended slightly higher, with expectations that domestic inflation data could reveal a 14-month high, potentially influencing interest rate decisions by the Reserve Bank of India. The global bond market is closely monitoring U.S. inflation data due out Wednesday, which could further influence yield movements and monetary policy.