Global bonds teeter near bear market as central bankers press inflation fight

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The Bloomberg Global Aggregate bond index, a key benchmark, is near falling into a bear market for the first time in decades.

Federal Reserve Chairman Jerome Powell's comments last week in Jackson Hole, Wyoming, have sent global bond markets into a slump. Powell spoke Friday, capping off the central bank's economic symposium. In his speech, he noted that the Fed will continue to raise interest rates to curb high inflation, but that the U.S. economy would likely see some pain ahead . The hawkish stance surprised investors and led to a bond-selling rout. Bond yields rise as prices fall.

Bonds slipping on Fed speak Yields ticked up after Powell's speech, sending prices down — although not at the same pace as stocks. "Although the stock market sold off sharply following Fed Chair Powell's Jackson Hole speech last week, bond yields only rose modestly as the bond market has already been pricing in an aggressive pace of rate hikes," Collin Martin, fixed income strategist at Charles Schwab said in an email Tuesday. He added that while yields on the U.S.

 

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