Overview
- On Tuesday the yield on France’s benchmark 10-year bond climbed to about 4.10%, a level not seen since 2008, while the 30-year yield reached roughly 4.9%.
- Investors raised long-term rate demands after renewed hostilities in the Middle East and sustained high oil prices increased fears of persistent inflation.
- France is now paying higher long-term rates than several euro-area peers, with its spread over German Bunds widening and borrowing costs exceeding those of Italy, Spain and Greece.
- The rise matters for public finances because France’s debt is around 117% of GDP and interest payments have already risen sharply, making the drafting of the 2027 budget more difficult, senior officials say.
- The move is part of a global sell-off in sovereign bonds that also saw U.S. long yields climb and the U.S. federal debt pass $40 trillion, prompting Treasury buybacks that underline wider market strain and limit fast policy fixes.