Global government bonds experience largest 2023 sell-off

<img width="250" height="141" src="https://www.leaprate.com/wp-content/uploads/2023/09/FIN-LP-Global-government-bonds-iStock-948920942-250×141.jpg" class="webfeedsFeaturedVisual wp-post-image" alt="" decoding="async" style="float: left; margin-right: 5px;" link_thumbnail="" srcset="https://www.leaprate.com/wp-content/uploads/2023/09/FIN-LP-Global-government-bonds-iStock-948920942-250×141.jpg 250w, https://www.leaprate.com/wp-content/uploads/2023/09/FIN-LP-Global-government-bonds-iStock-948920942-700×394.jpg 700w, https://www.leaprate.com/wp-content/uploads/2023/09/FIN-LP-Global-government-bonds-iStock-948920942-768×432.jpg 768w, https://www.leaprate.com/wp-content/uploads/2023/09/FIN-LP-Global-government-bonds-iStock-948920942-120×68.jpg 120w, https://www.leaprate.com/wp-content/uploads/2023/09/FIN-LP-Global-government-bonds-iStock-948920942-245×138.jpg 245w, https://www.leaprate.com/wp-content/uploads/2023/09/FIN-LP-Global-government-bonds-iStock-948920942-500×281.jpg 500w, https://www.leaprate.com/wp-content/uploads/2023/09/FIN-LP-Global-government-bonds-iStock-948920942.jpg 1365w" sizes="(max-width: 250px) 100vw, 250px" /><p>Some investors believe this is just the tip of the iceberg and predict government bonds will weaken even further. They may have a point, as both US and German government bond yields were pegged for significant quarterly increases but failed to live up to expectations.</p>
<p>Poor performances dashed the hopes of fund managers who thought this quarter would deliver a reprieve from the stand-out losses that crippled this asset in 2022. Everything seemed to be on track for a positive Q3 financial yield until the US Federal Reserve and central banks upped interest rates once again to stem the tide of inflation.</p>
<p>The aggressive approaches of central banks stymied the gains in bond yields earlier this year. Reuters used US benchmark 10-year treasury bonds as an example, which range around a 16-year high of about 4.55%. Treasuries are set to report a third consecutive annual loss.</p>
<p>This causes a ripple effect, influencing the performance of equities. On the back of this, <a href="https://www.leaprate.com/payments/cls-extend-payment-netting-service-global-currencies/" target="_blank" rel="noopener">global currencies</a> are trying to compete with a rallying dollar. Greg Peters, the co-chief investment officer at PGIM Fixed Income, told Reuters:</p>
<blockquote><p>The bias is finally being absorbed by the marketplace that rates will remain higher for longer.</p></blockquote>
<p>Last week, the <a href="https://www.leaprate.com/forex/market-news/daily-market-commentary-the-us-dollar-bounced-back-as-the-federal-reserve-announced-an-interest-rate-hike-of-0-5/" target="_blank" rel="noopener">US Federal Reserve</a> flabbergasted investors with its hawkish approach. Experts view this as an indication that borrowing rates for 2024 will hover around current levels.</p>
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<p>Investors are also not expecting rate cuts from the European Central Bank. It seems that policymakers are sustaining the present trend.</p>
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