Via fool.com
Global bond yields hit multiyear highs as debt and inflation fears rise
US 30-year yields topped 5%, while Japanese, German and French borrowing costs reached their highest levels in decades.
Long-term government borrowing costs rose to multiyear highs across the United States, Europe and Japan on Tuesday as investors confronted rising debt, inflation risks and geopolitical uncertainty.
The US 30-year Treasury yield climbed above 5% to its highest level since 2007. Ten-year yields traded near 4.73%, while recent Treasury auctions cleared at the highest yields in decades.
Japan’s 10-year borrowing cost rose to a three-decade high just below 3% amid inflation concerns and expectations that the central bank could raise rates as soon as September.
Germany’s 10-year yield reached its highest level since 2011, French yields rose to their highest since 2008 and Britain’s 30-year borrowing cost approached levels last seen in May, the highest since 1998.
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Developed-market debt has climbed as the US debt pile approaches $40 trillion. The Iran war has also lifted oil prices and inflation while weakening global growth.
Heavy borrowing by technology companies to build AI infrastructure is adding competition for capital. Rising sovereign yields increase financing costs for companies, mortgages and other loans.
The New York Fed estimates that the extra compensation investors demand to hold 10-year Treasuries is near a 12-year high. Higher Japanese yields could also reduce demand from Japanese investors for US debt.