Global bond yields surge, lifting borrowing costs and investor concern
10‑year U.S. yield near 4.77% after a global jump that pushed Japan, Germany and other markets to multi‑year highs
Yields on government bonds across the largest global markets have jumped to multi‑year — and in some cases multi‑decade — highs as investors price in the possibility that interest rates in major economies will remain elevated for longer than previously expected.
Benchmark 10‑year U.S. Treasury yields climbed to their highest level since Donald Trump's return to the White House at the start of last year, while 30‑year U.S. Treasury yields also rose markedly. The recent sell‑off in U.S. government bonds has intensified worries about the country's high public debt and the Treasury's need for further issuance.
Spread of the move across markets
Similar moves were visible elsewhere. Japan's 10‑year government bond yield topped 3 percent for the first time since 1996, and Germany's 10‑year Bund reached its highest level in about 15 years. Yields on long‑dated gilts and French government bonds also hit multi‑year peaks.
One key driver is rising investor expectations that the so‑called neutral interest rate — the level that neither stimulates nor cools economic activity — may be higher than previously estimated. Analysts point to bigger government spending and borrowing, plus large private‑sector investments, notably in infrastructure linked to artificial intelligence, as forces lifting that neutral rate.
Higher yields translate into greater borrowing costs for governments, companies and households, a particular concern for heavily indebted countries. The International Monetary Fund warned that rising yields in advanced economies could raise debt‑servicing costs for emerging markets.
Market sentiment stabilized somewhat during the day: the 10‑year U.S. yield fell to around 4.77 percent and the German 10‑year to about 3.35 percent, while European equities gained and U.S. stock indices opened a little firmer. Investors are now awaiting fresh U.S. labor market data and remarks from Federal Reserve officials, which could further shape expectations for future rate moves.
Photo: press material from the event
