India’s 10-year government bond yield rose to around 7.17%, its highest level in nearly two years, as elevated U.S. Treasury yields and expectations of further rate increases pressured local debt markets. The U.S. 10-year yield hovered near 5.2%, its highest level in nearly two decades, after stronger economic data and hawkish Federal Reserve signals increased bets on additional hikes. Expectations of a Reserve Bank of India rate increase next week also strengthened following August inflation of 4.82% and the Fed’s recent move. A planned reduction in the share of five-year and 10-year bonds in India’s October-March borrowing program could offer some relief after the selloff. The government plans to borrow INR 7.86 trillion during the period, with five-year bonds accounting for 12.1% and 10-year bonds 26.3%, down from 15.4% and 29%, respectively, in the first half. The rupee and bonds remain exposed to oil prices, global yields, RBI liquidity operations and upcoming U.S. economic data.