A combination of factors is causing turmoil in the US bond market. The escalating conflict between the US and Iran is contributing to increased US defense spending and higher energy costs. This surge in energy prices is fueling inflation fears in the bond market, which is already anxious about the US debt of $40 billion.

The yield on the 10-year Treasury bond, a measure of how much the US government pays to borrow money, rose to its highest level in nearly three years. This development is a concern for the global economy, as it can increase the cost of borrowing. Further details on the situation are available from analysis by Matthew Egan, CNN.