German 10-Year Yield Climbs to Highest Since 2023 on Inflation Fears

German bonds fell for a second day, sending government borrowing costs to the highest level since October 2023 on worries the war in Iran will stoke inflation further.

The yield on German 10-year debt climbed as much as three basis points to 2.96%. Traders boosted wagers on European Central Bank interest rate hikes, implying a 35% chance of a quarter-point increase by April and almost fully pricing a move by June. Two increases are now seen as likely by the end of 2026.