The global bond selloff gathered brutal pace on Thursday, driving the U.S. 10-year Treasury yield to 5.342% — its highest level in 24 years, surpassing even the 2007 peak and marking its highest reading since early 2002, Reuters reported. The benchmark, which anchors borrowing costs and asset prices worldwide, posted its biggest quarterly rise this century in the three months to September, climbing by almost 90 basis points.
The pain is not confined to America. French 10-year yields reached their highest level since 2002, Britain’s 30-year borrowing costs touched 6% for the first time since 1998, and Japanese government bond yields climbed to multi-decade highs. Reuters reported that the U.S. national debt has crossed $40 trillion, while debt-to-GDP ratios sit at or above 100% across all G7 economies except Germany.
Several forces are colliding. Soaring energy costs — with oil prices jumping over 2% on Thursday after China suspended oil products exports — are fanning inflation. The boom in artificial intelligence and data-centre building is heightening competition for capital and raising expectations for growth and long-term interest rates. And investors are increasingly focused on governments’ massive borrowing requirements. “Financial markets are in the midst of a discovery process to see where the new long-term anchor sits,” HSBC’s chief Asia economist Fred Neumann told Reuters, noting that until monetary tightening is delivered, bond markets will demand a premium for long-term borrowing.
The real economy is already feeling it. The average rate on 30-year fixed U.S. home loans jumped to 7.28% in the week ending October 1 — the highest in nearly three years and the biggest one-week increase in more than four years, according to Freddie Mac; a year ago it was 6.34%.
Why it matters: When the world’s risk-free benchmark pays over 5.3%, everything reprices — mortgages, corporate borrowing, government interest bills, and stock valuations all take the strain, tightening financial conditions far beyond what central bank rate decisions alone have achieved.
Sources:
https://www.reuters.com/world/10-year-us-treasury-yield-hits-highest-since-2002-2026-10-01/
https://www.thehindubusinessline.com/money-and-banking/us-treasury-yields-hit-highest-since-2002-as-global-bond-sell-off-deepens/article71533609.ece/amp/
