Global Rate Hikes Put Bond Diversification at Risk

Bloomberg reports that rate hikes are expected across major economies beyond the U.S., with about two-thirds of tracked swap markets pricing higher policy next year. Fueled by energy costs, fiscal stimulus, and an AI-driven growth boom, inflation pressures could force central banks to tighten further, potentially turning bonds from portfolio ballast into a drag as yields rise and financing conditions tighten, weighing on both bonds and equities.