Global bond sell-off spreads as oil holds above $100
Rising yields strain public finances as expectations of Fed rate rise in October jump to about 70%
Source: Financial Times
―
DW NOTE
The Fed raised rates seven days ago. Traders are now pricing a second hike in October at 70%. That would put the policy rate at 4.00%-4.25% — before the fiscal year 2026 deficit of $1.9 trillion has even been financed. Every 25 basis points on that volume adds $47.5 billion to annual debt service. The bond market isn't selling off because of oil. It's selling off because the arithmetic no longer works.