Bonds reel as hot inflation fuels jumbo Fed hike fears

Bond prices fell sharply after data showed hotter-than-expected inflation, raising the probability that the Federal Reserve will deliver a larger-than-usual rate increase. The primary transmission channel is inflation repricing: higher expected policy rates lift yields across the curve and widen the rate differential in favor of the dollar, which tends to strengthen USD against EUR, JPY and AUD. Gold, which pays no yield, typically faces pressure as real yields rise, while the Nasdaq 100 (NDX) and high-multiple growth names are vulnerable because discounted future cash flows lose value when rates climb. NVDA, with its premium valuation and heavy exposure to long-duration growth expectations, is especially sensitive, and KOSPI may weaken as dollar strength and global risk-off flows tighten financial conditions for Asian equities. Traders will focus on the next Consumer Price Index release and Fed speakers' comments on the terminal rate, as any further upside surprise would likely intensify the repricing.

The US Dollar (USD) is the world's primary reserve currency and the base for most forex majors. Headlines about Federal Reserve policy, US macro data (CPI, NFP, GDP), and Treasury yield shifts typically drive USD pair direction within seconds of release.

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