{"id":2018,"date":"2026-10-01T22:03:45","date_gmt":"2026-10-01T17:03:45","guid":{"rendered":"https:\/\/ipp-news.com\/?p=2018"},"modified":"2026-10-01T22:03:45","modified_gmt":"2026-10-01T17:03:45","slug":"us-treasury-yields-hit-24-year-high-as-global-bond-selloff-deepens","status":"publish","type":"post","link":"https:\/\/ipp-news.com\/?p=2018","title":{"rendered":"US Treasury yields hit 24-year high as global bond selloff deepens"},"content":{"rendered":"
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Global bonds were engulfed by heavy selling again on Thursday, sending borrowing costs from the US to \u200bFrance and Japan surging to levels not seen in decades in a warning to policymakers.<\/strong><\/p>\n

Higher rates raise financing costs for companies and mortgage borrowers and force governments to \u200cspend more on interest payments, with less left over for anything else.<\/p>\n

Bond yields, which rise when prices fall, have soared globally as soaring energy costs fan inflation. The boom in artificial intelligence and data-centre building have heightened competition for capital and raised expectations about economic growth and where short-term interest rates will settle.<\/p>\n

The US 10-year Treasury yield, a yardstick for global borrowing costs and asset prices, rose to 5.34%, its highest since 2002, on Thursday, having posted its biggest \u200bquarterly rise this century in the three months to September.<\/p>\n

And while dip buyers are stepping in, with the global benchmark last around 5.32%, there could still be scope for further moves.<\/p>\n

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\u201cFinancial \u200bmarkets are in the midst of a discovery process to see where the new long-term anchor sits,\u201d said HSBC\u2019s chief Asia economist Fred Neumann.<\/p>\n

Markets were \u2060responding to years of above-target inflation, he said and \u201cuntil monetary tightening is delivered, bond markets will demand a premium for longer-term borrowing.<\/p>\n

\u201cBut it would be unfair to lay the blame entirely on central \u200bbankers: in the end, it is expansionary fiscal policies that are equally to blame for persistent inflation.\u201d<\/p>\n

<\/a>FRANCE IN FOCUS<\/h3>\n

France is near the top of bond investors\u2019 minds. Its government is presenting a 2027 budget bill \u200bon Thursday which could struggle to get unpopular belt-tightening measures through parliament.<\/p>\n

In a sign of the challenge, French 10-year borrowing costs also hit their highest since 2002 on Thursday, trading close to the symbolic 5% level after turning in its worst quarterly performance since 1987 between June and September.<\/p>\n

While French yields also retreated from their early highs, the gap between French and German 10-year borrowing costs is at its highest since the euro zone debt crisis of the 2010s, \u200band the cost of insuring France\u2019s debt against the risk of default is at its highest since 2013.<\/p>\n

<\/a>GLOBAL PRESSURE<\/h3>\n

The European Central Bank is even facing questions about whether it might help shore up France\u2019s bond \u200bmarket, though market players say this seems unlikely for now.<\/p>\n

For sure, the upward pressure on yields and hence government finances, is global.<\/p>\n

The Washington-based Institute of International Finance recently estimated that over the past year, advanced economies paid \u200cmore than $3.3 \u2060trillion in interest on internationally traded government bonds alone \u2014 more than the estimated $2.6 trillion of global spending on AI, $3.1 trillion on defence or $2.3 trillion on clean energy.<\/p>\n

Britain\u2019s 30-year government bond yield rose above 6% to its highest since 1998 on Thursday, and data showing the slowest growth in house prices in nearly two years pointed to the impact of higher rates on the real economy.<\/p>\n

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In Japan, where inflation is taking hold after a decades-long battle with deflation, sovereign yields have notched an unprecedented fifth consecutive quarter of double-digit gains.<\/p>\n

<\/a>STOCKS HOLD UP FOR NOW<\/h3>\n

Good economic growth data globally is also part of the picture. Factory activity across \u200bEurope and Asia expanded last month, helped by AI \u200brelated investments, giving central banks little reason to \u2060worry about the consequences of tightening policy.<\/p>\n

\u201cStronger growth has encouraged markets to conclude that the economy can sustain higher rates for longer,\u201d said Julius Baer fixed income analyst Afonso Borges.<\/p>\n

Traders have scrambled to reverse earlier expectations for US interest rate cuts this year. After a hike last month, they now expect \u200bat least three more Federal Reserve hikes before the middle of 2027, even if cooler inflation data on Wednesday helped push back near-term expectations.<\/p>\n

European \u200binflation data this week has \u2060been hotter than expected, though, while the European Central Bank has raised rates twice this year and markets price three further 25-basis-point increases by mid-2027.<\/p>\n

But while assets from stocks to credit were jittery on Thursday, the selling was far from that seen in bonds.<\/p>\n

European stocks hit their lowest since June but were last down just 0.5%, while US stocks are set to open higher.<\/p>\n

In credit markets, an index of junk bond credit default \u2060swaps, which \u200bprotect against the risk of default, hit its highest since early April.<\/p>\n

\u201cI don\u2019t think we\u2019re necessarily yet at the point \u200bwhere higher rates can act as a showstopper,\u201d said Chris Scicluna, head of economic research at Daiwa Capital Markets.<\/p>\n

\u201cThere\u2019s a lot of news out there still about earnings, and there\u2019s a lot of positive momentum still to come through from AI-related \u200binvestments over the next couple of quarters.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Global bonds were engulfed by heavy selling again on Thursday, sending borrowing costs from the US to \u200bFrance and Japan surging to levels not seen in decades in a warning to policymakers. Higher rates raise financing costs for companies and mortgage borrowers and force governments to \u200cspend more on interest payments, with less left over for anything else. Bond yields, which rise when prices fall, have soared globally as soaring energy costs fan inflation. The boom in artificial intelligence and data-centre building have heightened competition for capital and raised expectations…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-2018","post","type-post","status-publish","format-standard","hentry","category-english"],"gutentor_comment":0,"_links":{"self":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/2018","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2018"}],"version-history":[{"count":0,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/2018\/revisions"}],"wp:attachment":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2018"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2018"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2018"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}