The Iran war caused the global bond market to plummet by 2.5 trillion US dollars, marking the largest monthly decline since 2022.

The Iran war triggered concerns of stagflation, causing global bond values to evaporate more than $2.5 trillion in March, potentially marking the largest monthly drop in over three years. The surge in oil prices has accelerated inflation expectations, leading to a sharp decline in bond prices. Although the drop in bond market value is not as significant as the approximately $11.5 trillion loss in global stocks, it is still unexpected, as bonds typically rise during geopolitical turmoil. Data shows that the total market value of government, corporate, and securitized bonds has fallen from nearly $77 trillion in February to $74.4 trillion, potentially marking the largest decline since September 2022, when the Federal Reserve was in a significant rate hike cycle. In percentage terms, the indicator has already dropped 3.1% this month. Government bonds led the decline, with the Bloomberg Sovereign Securities Index falling by 3.3% in March, and the corporate bond index falling by 3.1%. After three consecutive weeks of decline in U.S. bond prices, yields have risen to their highest levels in months, as the market speculates that the Federal Reserve may need to raise interest rates to combat inflation. In Asia, government bond yields in India, Japan, and South Korea have all risen. Australia's 10-year bond yield climbed to its highest level since 2011 on Monday, and New Zealand's government bond yield reached its highest level since May 2024.