The cost of borrowing has risen sharply in the US and other major markets

Government bond prices fell sharply in the US, France, Britain, and Japan, driving up yields and making borrowing more expensive. The yield on the US 10-year Treasury note reached 5.34% during the day, the highest level since 2002.

France's 10-year government bond yield approached 5% after the government presented its 2027 budget. Meanwhile, the UK's 30-year bond yield surpassed 6%, reaching its highest level since 1998.

Rising bond yields are making borrowing more expensive for companies, mortgage borrowers, and governments. The situation is further complicated by inflation driven by higher energy prices. At the same time, increasing amounts of funding are needed for AI-related projects and data center construction.

The US 10-year Treasury yield later eased to 5.26%, though analysts do not rule out further declines in the market. High interest rates are slowing economic growth and making it harder for central banks to cut rates.

Source: Reuters