Bond Markets Are Warning You: Inflation Risk Has Returned

Columbia Threadneedle’s latest fixed-income note reads like a reminder that the old playbook no longer applies. Bonds are no longer reacting only to growth fears or recession signals. They are reacting to geopolitics, commodities, and inflation uncertainty. 

• The U.S.–Iran conflict is described as the central driver of volatility, with Brent crude hovering near $100.
• U.S. Treasury yields rose sharply, with the 10-year reaching its highest level since mid-2025.
• Importantly, the rise was driven more by real rates and inflation expectations than by optimism on growth.
• Credit spreads widened only modestly, meaning duration risk hurt investors more than credit risk.

That is an unusual signal. Markets are saying financing conditions remain stable—for now—but the price of money itself is being repriced higher.