At a time when investors are debating whether and when the Federal Reserve will raise interest rates, market expectations for further tightening are rising around the world. This is bad news for the bond market. Traders expect borrowing costs to rise faster in Japan, Canada, the Eurozone, and the UK over the next year than in the US. Of the 32 interest rate exchange markets tracked by Bloomberg, two-thirds have reflected expectations of interest rate hikes. Among them, South Korea is in the lead, and the increase in market pricing has exceeded 100 basis points. This marks a shift in interest rate cycles dominated by the Federal Reserve in recent years. This time, central banks are facing multiple pressures: including rising oil prices due to the war in Iran, a sharp increase in government spending, and strong growth momentum brought about by the AI investment boom. Inflation in the OECD member countries recently rose to its highest level in two years.

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