Overview
- Global long‑dated government yields jumped on Tuesday to levels not seen in decades, with a Bloomberg gauge of sovereign yields near its mid‑2008 reading and major markets across the US, UK, Japan and Europe moving sharply higher.
- The UK 30‑year gilt yield approached about 5.9%, the highest since 1998, increasing the cost of financing ahead of the October 28 Budget and reflecting the Debt Management Office’s roughly £303.7 billion of planned gilt sales last year.
- Markets blamed a mix of renewed US‑Iran hostilities and oil trading above $90 a barrel, Fed Chair Kevin Warsh’s hawkish Jackson Hole remarks, and heavy supply from governments and record corporate borrowing including roughly $220 billion of AI‑related issuance.
- The US Treasury has stepped up long‑bond buybacks to support liquidity but officials and analysts say those measures have so far only partly calmed the move and central banks have limited room to fully reverse the repricing.
- Rising long‑term yields are already pushing mortgage and corporate borrowing costs higher, worsening fiscal pressures for countries such as the UK and the US after the national debt passed $40 trillion, and increase the likelihood that upcoming central‑bank meetings in September will shape the next leg of the sell‑off.