Bond yields will likely keep rising given the U.S. government's headlong push into debt-fueled spending and its reluctance to raise taxes, according to one London hedge-fund manager.

"Obviously the U.S. deficit is increasing, and there is no end in sight," said Igor Yelnik, founder of Alphidence Capital, a global macro hedge fund.

Climbing oil and natural-gas prices have also stoked the global bond selloff, particularly in countries like the U.K. that are vulnerable to energy shocks, he added.

High interest rates themselves aren't a cause for worry, Yelnik said. Still, he voiced concern that the stage is being set for a bigger downturn across markets, if rising yields and falling stock prices force the sudden unwinding of trades based on borrowed money.

"It's a recession scenario, which can become a vicious circle like we have seen in previous crises," he said. "Whether this scenario is going to materialize, I don't know, but this is a plausible scenario."