Global bond yields surged to multi-decade highs this week as fiscal pressures and energy-driven inflation tightened financial conditions across the U.S. and Europe, with France at the epicenter of market strain.
The French 10-year yield jumped 0.18 percentage points to 4.93% on Wednesday, while U.K. and U.S. 10-year yields reached 5.49% and 5.36% respectively, the highest since 2002, according to Axios. Goldman Sachs International co-CEO Kunal Shah said the moves remain "within the realm of fair valuation" given nominal growth, but warned that disorderly market functioning could prompt swift policy responses .
IMF Managing Director Kristalina Georgieva urged France to reduce its deficit below 5% of GDP, calling on authorities to "get your house in order" as protests over austerity measures escalated. France’s 2027 deficit is projected at 5.7%, with the government targeting €54 billion in fiscal adjustments .
In Italy, the FTSE Mib fell below 50,000 points as bond market turbulence weighed on equities, with the IMF noting governments face "difficult choices" amid rising debt servicing costs .
U.S. Treasury yields eased slightly after a strong $39 billion 10-year auction, but remained near 24-year highs as investors weighed Federal Reserve minutes signaling another rate hike by year-end .
