Bond Markets Hit by Oil Shock as Traders Bet on Higher Rates

The world’s bond markets were whipsawed by unusual volatility as investors rushed to bet on higher interest rates after key central banks signaled fresh concern the surge in oil prices will deliver an inflation shock.

Three weeks into the war in Iran, the fallout unleashed a major repricing of short-term bonds during much of Thursday’s trading day by dashing once widespread expectations that central banks would cut rates this year to spur growth.