Government bond rates continued their ascent on Thursday, pushing the yield on the benchmark 10-year Treasury note to 5.13%, its highest point since mid-October. The selloff extended across the curve to the 2-year note, which jumped more than 30 bps over two trading sessions to 4.89%, marking the steepest two-day increase for that maturity since March 2023.

The move follows a weak 30-year note auction on Wednesday that recorded a bid-to-cover ratio of 2.36, down from 2.54 at the previous sale. The volatility has spread to global markets, including bonds in France, Japan, and Australia, as investors react to hawkish Federal Reserve commentary and hotter-than-expected inflation data. Across eight major economies, markets now price in an average policy rate hike of more than 50 bps over the next year, compared to 33 bps on Nov 6.