Global Bond Yields Spike to Multi‑Decade Highs, Pressuring Markets

Overview

• Yields climbed sharply Thursday after S&P Global’s September services PMI rose to 58.7 and manufacturing to 57, surprising investors and increasing expectations of tighter US monetary policy.
• US Treasury yields hit multi‑decade highs with the 30‑year near 5.44%, the 10‑year above 5.08% and the 2‑year around 4.89%, while the UK 30‑year gilt reached about 5.89% and Japan’s 10‑year rose to roughly 3.07%.
• A renewed rally in Brent crude above $100 and weak demand at a recent US five‑year auction amplified the selling of long‑dated bonds and lifted borrowing costs across markets.
• The move knocked major US equity indexes lower, strengthened the dollar, and led markets to price materially higher chances of a Fed rate increase in October.
• Higher long‑term yields raise government interest expenses and consumer borrowing costs, with market estimates pointing to roughly £12 billion of extra UK interest costs before the October budget and the risk of tighter credit conditions for households and companies.