Global bond markets have suffered their deepest downturn since at least 1990 as investors brace themselves for rapid rises in interest rates from central banks that are battling the highest inflation in decades.

The Bloomberg global aggregate index, a broad gauge of government and corporate debt, has fallen by more than 11 per cent since its peak in January 2021, eclipsing a 10.8 per cent decline during the financial crisis in 2008 and marking the heaviest pullback in the history of the index running back to 1990.

The selling has accelerated since the start of the year as central bankers signal their determination to rein in inflation, which has soared to the highest levels in decades — even if they risk choking off the economic recovery in the process. Federal Reserve chair Jay Powell on Monday hinted that the US central bank is prepared to act more aggressively if necessary to keep a lid on price rises after raising interest rates last week for the first time since 2018.