Bank of America's Mark Cabana said that the global bond market has experienced a sell-off, reflecting investors reevaluating the level of neutral interest rates. Traders believe that Federal Reserve Chairman Kevin Walsh has given the market more room to test higher yields. Cabana, co-head of global interest rate strategy at Bank of America Securities, said that in an August speech in Jackson Hole, Walsh said that “it is difficult to say that the overall financial situation is restrictive,” which weakened the Federal Reserve's guidelines, which had previously suppressed market repricing. He said that more than half of the 2026 US 10-year Treasury yield increase occurred after this speech. Cabana said it was “extremely unlikely” that the Federal Reserve would raise interest rates again, even though policymakers are facing a dilemma: “Now there are two choices: either raise interest rates or bond yields soar.”

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