Global Bond Rout Hits Records From France to Japan

Government bond yields worldwide are hitting multi-decade highs as Iran war inflation, heavy debt supply, and sticky spending strain markets.

Bond yields are climbing almost everywhere at once. CNN Business reports that yields this week touched multi-year and multi-decade highs not only in the US Treasury market — the largest and most influential in the world — but also on government bonds in France, Germany, Italy, the United Kingdom, Japan, Canada and Australia. Investors are selling bonds, pushing prices lower and yields higher, and yields set interest rates across the economy, raising the cost of mortgages, auto loans and student borrowing. The New York Stock Exchange floor, photographed in August 2026, captured traders absorbing a run-up in yields to start the week before a brief Thursday breather that investors say does not change the underlying pressures.

Two forces are doing the damage. First, economies across the globe are facing stickier inflation because of the surge in energy prices tied to the war with Iran, raising fears that central banks may need to keep interest rates high — or raise them further. Second, supply: as governments ramp up borrowing to fund war and increased defense spending, investors are demanding greater compensation in the form of higher yields to hold all the new debt. According to CNN Business, BCA Research chief investment strategist Marko Papic said the global bond market is reacting to the potential danger that this is a prolonged crisis forcing governments to spend more money, with elevated uncertainty over the war's duration compounding nerves and relatively robust global growth also pushing yields up.

CNN Business reports that France's 10-year yield hit its highest level since 2008, with LPL Financial's Kristian Kerr noting the market is signaling concern that the government's proposed budget won't put spending on a sustainable path, and warning that a material deterioration in confidence toward French debt could spill over into weaker-fiscal countries. The UK's 10-year yield hit its highest since 2008 and its 30-year yield levels unseen since 1998, just as Prime Minister Andy Burnham's tenure begins — a echo of 2022, when bond-market revolt forced out Liz Truss after 44 days. In Japan, the 10-year yield hit 3%, its highest in 30 years, as the Bank of Japan raises rates after decades of ultra-loose policy and investors wary of the country's massive debt burden resist spending and tax-cut plans. Kerr added that at this stage the bond market is not signaling a crisis, but is sending a warning that merits attention.

The Motley Fool, via The Globe and Mail, reports the 10-year US Treasury yield is now hovering around 4.80%, raising borrowing costs for corporations and individuals at an especially bad time for the tech sector, which is pouring hundreds of billions of dollars into AI data-center capital expenditures. The same report puts US inflation at 3.4% year over year in July, well above the Fed's 2% target, making rate cuts harder to justify while the president pressures the Fed to lower them and threatens to halt trade with surplus countries unless it does. RSM US chief economist Joe Brusuelas told CNN that investors face a potent mix of higher inflation, higher interest rates and an unsustainable fiscal path — a recipe, he said, for everything that touches credit in the major economies to get much more expensive. Unless governments rein in spending and raise taxes, or tech firms scale back the AI buildout, yields could stay elevated for some time.