Global Bonds Hit Multi-Decade Highs as US Treasury Yield Soars
Global bond markets are under intense pressure as investors dump assets in response to rising interest rates. The US 10-year Treasury yield hit a 24-year high, reaching 5.34% on Thursday.
The surge in borrowing costs is attributed to surging energy costs driving inflation and heightened expectations of economic growth. Analysts warn that higher rates will tighten financial conditions and increase the risk of a slowdown.
France's bond market is particularly vulnerable, with its government presenting a budget bill that may struggle to pass parliament. French 10-year borrowing costs have hit their highest since 2002, trading near the symbolic 5% level.
The European Central Bank faces questions about whether it will intervene to support France's bond market, although market players say this seems unlikely for now.