Global bonds sell off sharply, pushing 10-year US yield to 5.34%, highest in 24 years

Money & Banking··USFR·Read original
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Summary · why it matters

Global bond markets faced heavy selling pressure, driving borrowing costs from the United States, France and Britain to Japan up to multi-decade highs amid concerns over inflation, elevated energy prices and the prospect that interest rates may stay high for a long time. The 10-year US Treasury yield, a key gauge of global borrowing costs, climbed to 5.34% during trading, the highest since 2002, after posting its biggest quarterly rise since the start of the century in the three months through September, before bargain hunting helped the yield ease back to around 5.26% in late US trading. In France, the 10-year bond yield rose close to 5%, the highest since 2002, after the French bond market turned in its worst quarterly performance since 1987, while the yield spread with Germany sat near its widest since the eurozone debt crisis and the cost of insuring against a French default hit its highest since 2013. In Britain, the 30-year bond yield surged past 6%, the highest since 1998, and Japan saw government bond yields rise by double-digit amounts for a fifth consecutive quarter, something never seen before. The Institute of International Finance estimates that over the past year, developed economies paid more than 3.3 trillion dollars in interest on government bonds traded in international markets, more than the roughly 2.6 trillion dollars in estimated global AI spending, 3.1 trillion dollars in defence spending and 2.3 trillion dollars in clean energy. Investors are rapidly shifting their views, with the market expecting the Fed to raise rates at least three more times before mid-2027 and the ECB to raise rates another three times, by 0.25% each, also by mid-2027.

Impact on assets 4

Others▲ · 4 stocks
％France Government Bond 10Y
FR-10Y
▲ PositiveMonetaryrelevance

French 10-year yield rose close to 5%, highest since 2002, on inflation concerns and expectations of ECB rate hikes.

％UK Government Bond 30Y
GB-30Y
▲ PositiveMonetaryrelevance

UK 30-year bond yield surged past 6%, highest since 1998, as markets expect rates to stay high for long.

％Japan Government Bond 10Y
JP-10Y
▲ PositiveMonetaryrelevance

Japan government bond yields rose by double-digit amounts for a fifth consecutive quarter amid global inflation and rate-hike expectations.

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