Bond Yields Soar to 2008 Levels as Fed Decision Looms Large
Global bond yields have hit their highest level since the 2008 financial crisis. The Bloomberg Global Treasury Index yields reached 3.68%, marking a significant increase before key rate decisions from major central banks.
The index, which tracks government debt from investment-grade countries, is on track for its biggest monthly drop since March. This selloff comes as traders price in a one-in-three chance of a July hike from the Federal Reserve.
US 30-year Treasury yields are trading just below their highest level since 2007, while UK gilts have logged their longest streak of daily closes above 5% in almost two decades. Germany's 10-year yield has reached its highest point since 2011, and Japan's 40-year yield moved above 4%, with the five-year yield hitting a record since it launched in 2000.
Australia now carries the highest benchmark yields in the developed world. BlackRock's iShares 20+ Year Treasury Bond ETF has fallen almost 5% in one month, losing more than half its value since 2020.
The rising bond yields have put pressure on equity valuations, corporate borrowing costs, and governments with heavy debt loads. Moody's believes markets may have entered a period of structurally higher inflation, higher rates, and wider fiscal deficits.
Bitcoin has held firm near $65,157, up 1.3% over the past day, but its resilience depends partly on how central banks act this week, particularly the Fed's decision on Wednesday.