Bond markets take a drubbing again as 10-year Treasury yields hit highest since 2002
TLT•Borrowing costs in the United States, France, Britain and Japan reached their highest levels in decades. The 10-year U.S. Treasury yield rose to 5.34%, its highest since 2002.
1. Treasury yields rise
The 10-year U.S. Treasury yield rose to 5.34%, its highest since 2002. Borrowing costs in the United States, France, Britain and Japan also reached their highest levels in decades, squeezing government finances and threatening stocks, credit and other global assets.
2. Reasons for the selloff
Market strategists cited rising central-bank rates, government deficits, funding demand from the AI sector and strong U.S. economic data as pressures on bond yields. HSBC Chief Asia Economist Fred Neumann said higher yields may be the new normal as markets search for a long-term anchor.
3. Fiscal policy concerns
City Index analyst Fiona Cincotta said governments would need to make difficult spending cuts to calm markets, but she saw little indication of that in Britain or France. Wren Sterling strategist Rory McPherson said there were not enough buyers for bonds.
