Global bond rout pushes 30-year US Treasury yield to highest since 2007
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A global sovereign bond selloff drove long-term borrowing costs to multi-decade highs this week, with 30-year US Treasury yields reaching 5.32% on Tuesday, the highest since mid-2007. French borrowing costs rose to their highest since 2008, German yields traded at 2011 levels, and UK 30-year gilt yields approached 6%. Investor angst ranges from inflation to the debt-laden artificial-intelligence boom, even as governments shift debt issuance toward shorter maturities.
Key Facts
- 30-year US Treasury yields reached 5.32% on Tuesday, the highest level since mid-2007.
- French borrowing costs rose to their highest since 2008, while German yields traded at 2011 levels.
- UK 30-year gilt yields are approaching 6%, and similar-maturity Japanese yields are close to their all-time high.
- US 30-year yields have climbed almost 40 basis points since the end of June.
- Governments including France, Germany, the UK, and Japan are shifting debt issuance toward shorter tenors where yields are lower.
Sovereign Yield Surge
This week, 30-year US Treasury yields rose to the highest since 2007, French borrowing costs hit the loftiest since 2008, and German peers traded at 2011 levels. In the UK, equivalent gilt yields are approaching 6%, while similar-maturity Japanese yields are close to their all-time high. US 30-year yields have climbed almost 40 basis points since the end of June to touch 5.32% on Tuesday. The rise in long-term yields feeds into corporate and consumer loans, a challenge for President Donald Trump and Treasury Secretary Scott Bessent ahead of midterm elections.
Structural Drivers
Investor concerns in each market are driven by fears of supply shocks and persistent inflation in an increasingly divided world order. The debt-laden artificial-intelligence boom and shifts in market structure and demographics are also reducing demand from once-steady buyers. Bondholders worry governments will fail to rein in spending, stimulating economies and keeping interest rates higher for longer. Finance ministers are shifting debt issuance toward shorter tenors where yields are lower. Chris Iggo, chief investment officer at AXA IM Core at BNP Paribas Asset Management, said only a sudden weakening in economic data or an external shock would improve the outlook for long-duration fixed income.
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Global bond rout pushes 30-year US Treasury yield to highest since 2007
