Global bond selloff deepens as US 10-year yield hits multi-decade high

Global government bonds faced another wave of selling on Thursday, 1 October, with borrowing costs from the United States to France and Japan climbing to multi-decade highs and pressure spilling into equity markets, Reuters reported from London and Singapore.

Yields at multi-decade marks

The US 10-year Treasury yield rose to about 5.34%, its highest since 2002, after posting its largest quarterly increase this century in the three months through September. Britain’s 30-year gilt yield crossed 6%, the highest since 1998, while the French 10-year OAT briefly approached 5%, levels last seen around 2002. Yields rise when bond prices fall; the move reflects soaring energy costs, AI-related growth expectations and bets that short-term policy rates will stay higher for longer.

Fiscal strain and markets

Higher rates raise financing costs for companies, mortgage borrowers and governments. The Institute of International Finance recently estimated that advanced economies paid more than $3.3 trillion in interest over the past year on internationally traded government bonds. European bank stocks fell as much as about 3%, and the STOXX 600 touched its lowest since June. Traders now expect at least three more Federal Reserve hikes before mid-2027 after a September increase, Reuters said, while markets also price further European Central Bank moves.