Bond Crush and Rising US Bond Yields Stifle Markets, Triggering REITs Sell-Off

A surge in long-term Treasury yields is causing turmoil in global markets as the Federal Reserve remains committed to raising rates, $134 billion of new government debt is set to be sold this week, and the possibility of a government shutdown looms. The spike in yields has strengthened the U.S. dollar and exacerbated financial stress worldwide. The market is focused on longer-dated U.S. Treasuries, which are repricing the economy's resilience and inflation pressures. The 10-year Treasury yield reached a 16-year high, while the 30-year bond yield hit a 12-year high. The 10-year real yield also rose to its highest level since 2009. The yield gap between 2-year and 10-year Treasuries, which has indicated a recession, is narrowing. The market is also grappling with the upcoming heavy supply of new government debt and the potential government shutdown. The Federal Reserve shows no signs of calming the situation, with officials suggesting the need for further rate hikes. Private sector bankers are preparing for the worst, and European Central Bank officials are also signaling a higher-for-longer approach.