Last week, U.S. Treasury yields hit a 24-year high, intensifying the global bond market sell-off.

智通财经2026/10/04 23:06

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1. Last week, a new wave of sell-offs swept across the global bond market, pushing borrowing costs in major economies to multi-decade highs. As a key benchmark for global borrowing costs and asset prices, the yield on the US 10-year Treasury note once climbed to 5.358%, the highest since 2002, before pulling back to around 5.26%. Over the three months ending in September, the 10-year US Treasury yield recorded its largest quarterly gain of the century. 2. Bond yields move inversely to prices and have generally risen worldwide due to surging energy costs driving up inflation. The booming development of artificial intelligence and data center construction has further intensified competition for capital, fueling expectations for economic growth and the eventual trajectory of short-term interest rates. Danny Zaid, Portfolio Manager at TwentyFour Asset Management, stated that rising yields will gradually tighten financial conditions and could increase the risk of an economic slowdown, but the overall economic fundamentals currently remain strong. 3. Higher interest rates increase financing costs for corporations and mortgage borrowers, while also forcing governments to ramp up interest spending. The pressure is not limited to the US. French 10-year government bond yields reached their highest level since 2002, nearing 5%, as the French government prepares to submit its 2027 budget, whose austerity measures may struggle to secure parliamentary support. The yield spread between French and German 10-year bonds has hit its widest since the eurozone debt crisis of the 2010s, and the cost of insuring against French government debt default has climbed to its highest since 2013. 4. The yield on UK 30-year government bonds has surged above 6%, the highest since 1998. In Japan, sovereign bond yields have posted double-digit growth for the fifth consecutive quarter, setting new records. The Institute of International Finance recently estimated that developed economies have paid over $3.3 trillion in interest on internationally traded government bonds over the past year. 5. Last month, factory activity in Europe and Asia expanded thanks to investments related to artificial intelligence, making central banks in these regions less concerned about the impacts of policy tightening. J. Safra Sarasin fixed income analyst Alfonso Borges noted that stronger economic growth has led markets to believe economies can withstand higher interest rates for longer. Traders have reversed previous expectations of US rate cuts this year and now anticipate the Federal Reserve will raise rates at least three more times by mid-2027. However, the US inflation data released on September 30th was milder, lowering market expectations for a near-term rate hike. Last week, European inflation data surpassed forecasts; the European Central Bank has raised rates twice so far this year, and markets expect three more 25-basis-point rate hikes by mid-2027.

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1. Last week, a new round of sell-offs swept the global bond market, sending borrowing costs in major economies to their highest levels in decades. As a key reference for global borrowing costs and asset prices, the yield on the US 10-year Treasury note briefly rose to 5.358%, the highest since 2002, before retreating to around 5.26%. In the three months through September, the 10-year US Treasury yield recorded its biggest quarterly increase this century.2. Bond yields move inversely to prices. Driven by surging energy costs that have pushed inflation higher, global bond yields have generally risen. The booming development of artificial intelligence and data center construction has also intensified competition for capital and heightened expectations for economic growth and the outlook for short-term interest rates. Danny Zaid, portfolio manager at TwentyFour Asset Management, said yields rising gradually will tighten financial conditions and may increase the risk of an economic slowdown, but the overall macroeconomic fundamentals remain robust for now.3. Rising interest rates increase financing costs for corporates and mortgage borrowers, while also forcing governments to spend more on interest payments. The pressure is not limited to the US. The yield on France’s 10-year government bonds has reached its highest level since 2002, approaching 5%, as the French government prepares to present its 2027 budget proposal, with tightening measures that may struggle to gain parliamentary support. The spread between French and German 10-year borrowing costs has reached the highest level since the eurozone debt crisis of the 2010s, and the cost of insuring French debt against default is also at its highest since 2013.4. The yield on the UK’s 30-year government bonds climbed above 6%, hitting the highest level since 1998. In Japan, sovereign bond yields have posted double-digit growth for five consecutive quarters, a record high. The Institute of International Finance recently estimated that over the past year, developed economies paid more than $3.3 trillion in interest on government bonds issued for international transactions.5. Last month, AI-related investments helped drive expansion in manufacturing activity in Europe and Asia, making central banks less concerned about the impact of tightening policies. Julius Baer fixed income analyst Alfonso Borges said stronger economic growth has led markets to believe the economy can withstand higher interest rates for a longer period. Traders have reversed their previous expectations for US rate cuts this year and now anticipate that the Federal Reserve will raise rates at least three more times by mid-2027. However, US inflation data released on September 30 was relatively mild, lowering market expectations for another rate hike in the near term. Last week, European inflation data exceeded expectations, and the European Central Bank has already raised rates twice this year. Markets expect three more 25 basis point hikes by mid-2027.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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Last week, U.S. Treasury yields hit a 24-year high, intensifying the global bond market sell-off.

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