- US government long-term borrowing costs hit their highest level since the financial crisis, with the 30-year Treasury yield rising to 5.29%, its highest level since 2007 – the year of the credit crunch that preceded the 2008 financial crisis.
- The yield on 30-year French bonds rose to its highest level since September 2008 at 4.8558%, up one basis point (0.01 percentage point), LSEG data showed.
- France’s 10-year bond yield hit its highest level since June 2009, up 1bp to 4.0516%.
- The equivalent German bond rose to its highest yield since 2011 at 3.2138%, up 1.5bps.
- Japan’s 10-year government bond yield hit a three-decade high at 2.93%, as investors anticipated the Bank of Japan would need to raise interest rates.
Government borrowing costs in advanced economies have reached alarming heights, with the U.S. 30-year Treasury yield climbing to 5.29%, the highest since 2007. This surge reflects investor anxiety over persistent inflation, driven by geopolitical tensions, particularly in the Middle East.1
In Europe, France's 30-year bond yield rose to 4.8558%, marking its highest level since September 2008, while Germany's bond yield reached 3.2138%, the highest since 2011. These increases indicate a broader trend of rising borrowing costs across major economies, as investors brace for sustained inflation.24
Japan is also feeling the pressure, with its 10-year government bond yield hitting 2.93%, the highest since September 1996, as expectations grow that the Bank of Japan may need to raise interest rates soon to support the yen.5
The current economic climate is reminiscent of the pre-2008 financial crisis, raising concerns about the potential for a similar downturn. As borrowing costs rise, the implications for economic growth and consumer spending could be significant, prompting calls for careful monitoring of inflation trends and monetary policy responses.
Overall, the situation underscores the fragility of the global economy as it grapples with high inflation and geopolitical uncertainties.
“The yield on US 30-year Treasuries reached 5.29%, the highest since 2007, reflecting investor concerns over persistent inflation. Meanwhile, Bank of America strategist Michael Hartnett emphasized gold as the best hedge against economic instability, highlighting a significant inflow of nearly $12 billion into gold-backed ETFs.”
theguardian.com
