Global Bond Sell-Off Pushes US 10-Year Yield to 24-Year High

• Government borrowing costs across major economies climbed to multi-decade highs on October 1, 2026, as concerns over persistent inflation, further interest-rate increases and rising government debt intensified. The 10-year US Treasury yield reached 5.34%, its highest since 2002.
• The US 10-year yield rose almost 90 basis points during Q3, its largest quarterly increase so far this century. The sell-off has also spread globally, with French 10-year yields reaching their highest since 2002, UK 30-year borrowing costs touching 6% for the first time since 1998, and Japanese yields reaching multi-decade highs.
• Renewed increases in oil prices amid US-Iran tensions have added to inflation concerns and expectations of further monetary tightening. At the same time, investors remain focused on growing government borrowing requirements, with US debt exceeding US$40Tn and debt-to-GDP ratios at or above 100% across most G7^[1]
• Higher government bond yields can feed directly into borrowing costs across the economy, including mortgages, car loans and corporate debt. At the same time, a surge in debt issuance to finance artificial-intelligence (AI) investment is adding to bond supply and placing further upward pressure on yields.
• The bond sell-off reflects more than expectations for central-bank tightening, with persistent inflation, elevated sovereign borrowing and growing corporate debt issuance all contributing to higher yields.

(Source: Reuters)

 

 

^[1] The G7 economies comprise Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.