Overview
- Yields jumped sharply on Thursday with the US 10‑year Treasury trading above 5 percent and the 30‑year near 5.6 percent, while long gilts, French, German and Japanese yields also hit multi‑year highs.
- Market observers link the move to an oil supply shock from the Iran/Gulf conflict that has lifted inflation expectations and pushed investors to demand higher long‑term rates.
- Massive net government borrowing, including US federal debt already above $40 trillion and large planned issuance, is increasing the supply of sovereign bonds and pressuring yields higher.
- Corporate bond issuance by major tech firms financing AI and data centers has added large private demand for funding that competes with sovereign borrowing for investor cash.
- Central banks raised policy rates in September and US Treasury long‑end buybacks have supported liquidity only marginally, a dynamic that is raising mortgage costs, cooling property markets and forcing investors to rethink allocations between bonds and stocks.