Global Bond Yields Hit 2008 Highs as US 10-Year Tops 5%
Global bond yields hit 2008 highs, raising stakes for big borrowers
Government borrowing costs reached their highest since the 2008 financial crisis, with the 10-year US Treasury yield exceeding 5% and the average G7 yield hitting 4.285%. The bond selloff, driven by oil above $100 and expectations of Fed rate hikes, raises pressure on indebted borrowers. New Fed Chair Kevin Warsh's aversion to forward guidance adds uncertainty, while fiscal anxiety and AI capex complicate the picture.
Yields at 5% aren't a problem if you're growing 6.5%. But if you're growing 5% with yields at 5%, that might be a different story.
- throw0101c
Italian and Greek bonds now have lower yields/rates (i.e., considered lower risk(?)) than US bonds:
- tananaev
Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.
- podocarp
Turns out countries with constitutions forbidding excessive debt are quite smart. It's like phone addiction -- if the parents don't lead by example and strictly enforce "no phones at the dinner table" then slowly it's just gonna creep back in and everyone's just staring at their phones again.
- rdm_blackhole
France is in a dire situation right now.
10y OAT are at 4.5% and rising with almost 100bps difference with Germany and no budget for 2027 since there is no majority in the parliament.
There is also a 6% deficit expected and growth has been revised down to 0.4% although during the first 6 months of 2026 there was actually a decrease of 0.2% of GDP in total so finishing the year in recession is totally possible.
Unemployment could also reach around 9% (15% in real terms if you count the people who have given up and/or been removed from the stats since they ran out of benefits).
Finally gasoline could reach 3 euros/liter (USD $13 per gallon) before the end of the year (already sitting at 2.5 euros/liter in many parts of France right now).
- 2OEH8eoCRo0
"I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody."
- James Carville
- pjc50
The war(s), especially with the impact on pipelines and the Houthis taking over more of Yemen, are finally affecting fuel prices and hence turning the global economic outlook less positive.
You can print money, but you can only ""print"" oil for a short time from reserves, which the US and China have been draining.
- skybrian
They have different kinds of risk, but do AI investments and bonds compete for investors?
- eggplantemoji69
Curious to see what transpires with federal fund rate alteration in the acute future.
Both Warsh and Bessent are pupils of Druckenmiller, but Warsh seems aligned with Druckenmiller regarding letting the market naturally settle on appropriate bond yields, whereas Bessent is being a Trump puppet and attempting these various failed interventions to artificially lower yields.
I hope Warsh stays strong and doesn’t bend the knee!