The global bond rout deepened on September 2, pushing borrowing costs in Germany, Japan, the United States and Britain to multi-year or multi-decade highs.
Germany’s benchmark 10-year Bund yield rose four basis points to 3.378% on Wednesday, its highest level since 2011, CNBC reported.
Japan’s 10-year government bond yield stood at 3.016% after crossing 3% a day earlier for the first time in three decades.
The U.S. 10-year Treasury yield touched 4.814%, its highest level since November 2023, while Britain’s 10-year gilt yield reached 5.25%, a post-2008 high, before both eased slightly.
Investors were reacting to renewed inflation pressures as higher oil prices from the Middle East conflict added to concerns over large government debt loads in major economies.
Read: Iran Tensions Hit Markets as Global Bond Yields Surge
Markets also expected tighter monetary policy. CNBC said investors were pricing in possible interest-rate increases this month by the Federal Reserve, the Bank of Japan and the European Central Bank.
Federal Reserve Chair Kevin Warsh had struck a hawkish tone at Jackson Hole the previous week, while markets were fully pricing in an ECB rate increase following fresh European Union inflation data, CNBC reported.
George Maris, chief investment officer and global head of equities at Principal Asset Management, told CNBC that the rising “cost of money” and “cost of risk” was visible in higher yields worldwide.
Read: Bond Vigilantes Return as Global Debt Slump Deepens
Maris also pointed to elevated global debt levels and warned that governments had shown limited willingness to address their fiscal positions.
Equity markets moved into risk-off mode alongside the bond selloff. CNBC reported that major U.S. indexes had fallen for three consecutive sessions, while European and Asian markets were also in negative territory.
