Global government bond yields climbed sharply as investors reassessed inflation, public borrowing, energy prices and geopolitical risks, with the U.S. 10-year Treasury yield reaching 4.8% on September 2, its highest level since November 2023, and Japan's 10-year yield exceeding 3% for the first time since 1996. Gargi Pal Chaudhuri, chief investment and portfolio strategist at BlackRock's Americas division, which oversees $4.7 trillion in assets, said investors should prepare for interest rates staying higher for longer. BlackRock's Fall Investment Directions report cited Treasury buybacks, higher oil prices after renewed U.S.-Iran military clashes, rising Japanese yields, growing U.S. national debt, AI-related funding needs and possible further Federal Reserve rate increases as pressures on yields. Broader market participants also pointed to deglobalization, protectionism, industrial reshoring, higher defense spending and geopolitical fragmentation as forces that could make inflation more persistent. Pal Chaudhuri favors shorter- and intermediate-duration bonds, dividend stocks and quality companies with stable earnings growth, strong balance sheets, high free cash flow and durable competitive advantages. Higher real rates are making bonds more competitive with equities, while inflation volatility may reduce the diversification benefits of bonds and higher yields may constrain stock-market multiple expansion.