Bond traders are paying the highest premiums since March to protect against a further climb in longer-dated yields. This surge in hedging costs reflects the ongoing market reaction to the Federal Reserve's recent policy meeting.

The cost of options that profit from rising yields on US Treasury debt, particularly those maturing in 10 years and beyond, has escalated. This indicates heightened investor concern about potential further increases in borrowing costs.

Specifically, the implied volatility on options that bet on a selloff in Treasury bonds has jumped. This suggests a growing expectation among market participants for more significant price declines and yield increases in the near future. The market is bracing for continued volatility.