A global bond selloff pushed the US 10-year Treasury yield to its highest level since early 2025 amid thin August trading, with investors wary of inflation and heavy corporate issuance. Sovereign bonds from Europe to Japan moved similarly as uncertainty over the inflation outlook and changes to bond-buying structures weighed on demand. Germany sold 30-year debt via banks earlier, sending yields to 15-year highs.

BMO Capital Markets US rates strategist Ian Ling said the selloff "has become a macro event." He said he does not expect a Fed hike next month but markets may not price a zero probability ahead of the decision; the cancellation of forward guidance has further complicated the policy outlook.