An escalating conflict between Israel and Iran has rattled global markets, pushing oil prices sharply higher and sparking renewed fears of stagflation

The selloff in the 10-year Treasury kicked off Friday right after Israel abruptly launched military strikes against Iran, and the pressure hasn’t let up since.

Pakistan's central bank kept its key interest rate unchanged at 11 per cent on Monday, in line with expectations, as the conflict between Israel and Iran and volatile global oil prices added upside risks to inflation.

Friday's selloff in U.S. government debt, sparked by inflation concerns stemming from the escalating conflict between Israel and Iran, sent Treasury yields up by the most in one week as oil prices surged.

The State Bank of Pakistan has kept the interest rate unchanged at 11% amid inflation risks from rising global commodity prices in the wake of Iran-Israel conflict.In its last meeting on May 5,

This spike came after Israel struck Iran’s nuclear and missile sites, raising fears of further retaliation and supply disruptions. “The Strait of Hormuz is a chokepoint for nearly 20% of global oil flows, and any threat to its safety adds a geopolitical risk premium,” she added.

Iran and Israel continued on Sunday their aerial attacks, which began Friday with a series of Israeli strikes on Iran.