Inflation forecasts remain a key force behind bond market behaviour this year. One-year-ahead inflation expectations in the US sit at about 3.2 %, with three- and five-year ahead views at roughly 3.0 %. Meanwhile the benchmark 10-year US Treasury yield is around 4.13 % and the euro-area 10-year yield sits near 3.10 %. Here’s why this matters for bonds: elevated inflation expectations erode real returns on fixed-income securities, so investors demand higher yields as compensation. This keeps long-term yields elevated even if the economy slows. In short — bond markets are reacting not only to current inflation but to what inflation will be, how credible central banks are in controlling it and how much extra return investors require for risk of surprise inflation. For you as an investor this means: keep an eye on inflation-expectation metrics (not just headline CPI), monitor how central banks respond to signs of price pressure, and recognise that bond yields may remain higher for longer. If you’re ready to engage with markets — bonds, fx, commodities and more — join us at https://my.nordfx.com/en/registration?utm_source=social&utm_medium=post&utm_campaign=nordfx 🚀 📌 Why Inflation Expectations Are Driving Bond Markets in 2025 📊 was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this storyInflation forecasts remain a key force behind bond market behaviour this year. One-year-ahead inflation expectations in the US sit at about 3.2 %, with three- and five-year ahead views at roughly 3.0 %. Meanwhile the benchmark 10-year US Treasury yield is around 4.13 % and the euro-area 10-year yield sits near 3.10 %. Here’s why this matters for bonds: elevated inflation expectations erode real returns on fixed-income securities, so investors demand higher yields as compensation. This keeps long-term yields elevated even if the economy slows. In short — bond markets are reacting not only to current inflation but to what inflation will be, how credible central banks are in controlling it and how much extra return investors require for risk of surprise inflation. For you as an investor this means: keep an eye on inflation-expectation metrics (not just headline CPI), monitor how central banks respond to signs of price pressure, and recognise that bond yields may remain higher for longer. If you’re ready to engage with markets — bonds, fx, commodities and more — join us at https://my.nordfx.com/en/registration?utm_source=social&utm_medium=post&utm_campaign=nordfx 🚀 📌 Why Inflation Expectations Are Driving Bond Markets in 2025 📊 was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story

Why Inflation Expectations Are Driving Bond Markets in 2025

2025/11/13 23:02

Inflation forecasts remain a key force behind bond market behaviour this year. One-year-ahead inflation expectations in the US sit at about 3.2 %, with three- and five-year ahead views at roughly 3.0 %. Meanwhile the benchmark 10-year US Treasury yield is around 4.13 % and the euro-area 10-year yield sits near 3.10 %.

Here’s why this matters for bonds: elevated inflation expectations erode real returns on fixed-income securities, so investors demand higher yields as compensation. This keeps long-term yields elevated even if the economy slows. In short — bond markets are reacting not only to current inflation but to what inflation will be, how credible central banks are in controlling it and how much extra return investors require for risk of surprise inflation.

For you as an investor this means: keep an eye on inflation-expectation metrics (not just headline CPI), monitor how central banks respond to signs of price pressure, and recognise that bond yields may remain higher for longer.

If you’re ready to engage with markets — bonds, fx, commodities and more — join us at https://my.nordfx.com/en/registration?utm_source=social&utm_medium=post&utm_campaign=nordfx 🚀


📌 Why Inflation Expectations Are Driving Bond Markets in 2025 📊 was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

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