Overview
- Yields spiked on Tuesday, with 30-year US Treasuries near 5.3% and 10-year US yields around 4.7%, while German 10- and 30-year Bunds climbed to about 3.2% and 3.7%.
- Analysts cite higher oil prices linked to the Iran conflict and investors’ expectation that central banks will keep rates higher for longer as key drivers of the rise in long-term yields.
- Large technology firms have issued big corporate bonds to fund AI infrastructure, adding supply to fixed-income markets and forcing issuers to offer higher yields that push overall rates up.
- The move is hurting interest-sensitive equities, with tech and semiconductor stocks suffering sharp losses, and it is raising mortgage and corporate borrowing costs for households and companies.
- Economists warn that sustained high long-term yields will lift governments’ refinancing bills, tightening fiscal space and increasing the risk of broader sovereign debt stress.