German bond yields rise amid Iran conflict uncertainty

German Finance Minister Lars Klingbeil has attributed the recent surge in German bond yields to the global uncertainty caused by the conflict in Iran involving the United States and Israel. Speaking at a conference in Liechtenstein, Klingbeil stated that the rise in borrowing costs is a direct consequence of the war initiated by Donald Trump in Iran.

German 30-year government bond yields reached 3.79% last week, their highest level since 2011. This spike is driven by inflation fears stemming from the Middle East impasse. Since February 28, the conflict has disrupted energy supplies, particularly following reports that Tehran has effectively closed the Strait of Hormuz, a critical maritime passage for hydrocarbons. Consequently, oil prices have remained high, exceeding $90 per barrel.

The economic impact extends beyond financial markets, as rising interest rates increase borrowing costs for states, businesses, and households across Europe. Similar trends in rising yields have been observed in markets including the United States and Japan, as investors react to energy-driven inflation and sovereign debt concerns.