Investors are getting rid of their sovereign bonds worldwide, pushing borrowing costs to record levels for several years, from Japan to the United States. They fear that war-related inflation will force central banks to adopt higher interest rates.
In the United States, the yield on two-year Treasury bonds has risen to 4.07%, the highest level since March 2025. The yield on 10-year Treasury bonds has increased by seven basis points to reach 4.55%, its highest level in a year, while the yield on 30-year Japanese bonds has reached 4% for the first time since its launch in 1999. A political crisis in the UK has pushed 30-year gilt yields to a 28-year high.
The massive sell-off intensified as the weekend approached, with rising Brent prices amplifying concerns raised by consecutive reports on inflation in the United States and the ongoing conflict between the US and Iran. In addition to bets on Fed rate hikes, speculation on monetary policy tightening is also gaining ground in Japan, where producer prices have increased at the fastest pace since 2014.
“Bond yields really seem to be becoming uncontrollable,” said Subadra Rajappa, head of research at Société Générale Americas, on Bloomberg Television. “The market is not just testing the Fed, it is also warning Congress. The higher interest rates go, the more financing costs increase.”
“The rise in global bond yields is a bit worrying,” said Prashant Newnaha, senior rates strategist for the Asia-Pacific region at TD Securities in Singapore.
Context: Increased selling of sovereign bonds globally has led to a surge in borrowing costs, driven by inflation fears and geopolitical tensions.
Fact Check: While the content discusses economic trends and market reactions, it is important to verify specific figures and developments through official sources for accuracy.
[Continue article with more headlines and detailed analysis…]
