Forex
Yield Shock: Trump Policies Spur Bond Market Chaos
The global cost of capital is shifting rapidly, with yields in key bond markets surging overnight.
US Treasuries are experiencing higher yields due to increasing US government deficits and debt, as well as inflation kept high by Donald Trump's trade wars and the boom in AI-related investment.
The yield on 10-year bonds jumped from 4.96% to 5.13%, its highest level since 2007, after a weak $70 billion auction of five-year Treasury notes and a report showing an unexpected jump in manufacturing and service sector activity.
Markets around the world are experiencing turmoil, with similar spikes in yields occurring in major markets like Europe. Historically high levels of government deficits and debt are driving these increases.