European government bonds have slipped in tandem with US Treasuries after the latest US consumer price index (CPI) reading bolstered expectations that the Federal Reserve may deliver another rate hike next week.

Germany's 10-year Bund yield climbed 2 basis points to hit an intraday peak of 3.52%, reflecting the broader sell-off across fixed-income markets as traders priced in a more hawkish Fed stance.

The move underscores how US inflation dynamics continue to ripple through global debt markets, with investors now weighing the likelihood of further tightening from the Federal Reserve. The data, which showed US CPI rising at a monthly rate of 3.4% in August, fueled speculation that the central bank could act imminently.

As a result, European bond yields—led by the German benchmark—are tracking the weakness seen in US Treasuries, with market participants adjusting portfolios in response to the shifting rate outlook.