Summary · why it matters
The global government bond market is closing out the third quarter with its worst returns since 2024, after oil prices surged to $100 a barrel, reviving fears that global inflation could stay elevated longer than expected and forcing many central banks to keep monetary policy tight. The Bloomberg Global Treasury Index has fallen more sharply than at any time since the final quarter of 2024, the period when Donald Trump won his second term as U.S. president. U.S. Treasuries were among the hardest-hit markets, with the 30-year yield climbing to 5.64%, a level not seen since 2002, while shorter-dated bonds also came under selling pressure. Over the past three months, central banks including those of Australia, the euro area, Japan, Norway and the United States have all raised interest rates to counter price pressures, and investors still expect the Fed to hike at least three times over the next year, even though Goldman Sachs has pushed back its forecast for the Fed's next rate increase to December from an earlier expectation of October. France's bond market suffered the heaviest selling among major economies, with the yield on 10-year French government debt rising 1.15 percentage points this quarter to 4.8%, its worst quarterly performance at least since the euro was created in 1999. The spread of French 10-year yields over German bunds has widened by more than 1.2 percentage points, a level not seen since 2012.
Goldman Sachs Group Inc