Bonds sold off to begin the week, pushing up yields on sovereign debt, after U.S. inflation accelerated and oil prices resumed their rally. The consumer price index was up 3.8% year-over-year, the highest level in three years and hotter than a 3.3% rise in March, according to the Labor Department on Tuesday. Gasoline prices grew at a slower pace but continued to drive headline inflation. Excluding energy and food categories, core inflation climbed to 2.8% from 2.6%. Brent and West Texas Intermediate crude both eclipsed the $100-per-barrel threshold again this week, as traders grew less optimistic that a resolution to the war in Iran was close.

The pop in inflation comes as Jay Powell prepares to hand the reins of the Fed to Kevin Warsh, who was confirmed by the Senate on Wednesday for a four-year term as chair of the central bank. With elevated energy costs feeding inflation, market participants don’t expect any rate cuts from the Fed this year, the CME Group’s FedWatch Tool showed. The Treasury market also reflected this sentiment, as the benchmark 10-year yield traded near its year-to-date highs this week. Financial conditions also have tightened elsewhere. In the U.K., the 10-year gilt yield reached a fresh post-2008 peak amid the oil supply crunch and domestic political uncertainty. Meanwhile, the U.S.-China summit is underway and could add new wrinkles to the outlook, with trade and other economic matters expected to be on the agenda.

PGIM’s Daleep Singh, Vice Chair and Chief Global Economist, speaks with Edward Fishman, author of “Chokepoints: American Power in the Age of Economic Warfare,” on The Outthinking Investor podcast to unpack how and why economic warfare is reshaping the macro landscape.