The global government bond selloff intensified on Wednesday, pushing long-term U.S. Treasury yields to their highest levels in more than two decades.
Investors remained concerned about heavy government borrowing, persistent inflation risks and the upcoming release of the Federal Reserve’s September meeting minutes.
U.S. 30-Year Treasury Yield Hits 24-Year High
The 30-year U.S. Treasury yield climbed as high as 5.7041%, marking a fresh 24-year peak before easing slightly.
Meanwhile, the benchmark 10-year Treasury yield edged higher to around 5.334%.
Investors are demanding greater compensation for holding longer-term government debt as sovereign borrowing requirements continue to increase worldwide.
That shift has pushed term premiums higher and added pressure across global bond markets.
U.S. Treasury Auctions Remain in Focus
Fixed-income markets are also preparing for another heavy round of U.S. government debt issuance.
Tuesday’s $39 billion auction of three-year Treasury notes attracted relatively stable demand compared with recent weaker auctions.
However, borrowing costs remained elevated, with auction yields reaching their highest levels in around 20 years.
Attention is now shifting toward upcoming sales of 10-year and 30-year U.S. government bonds.
Demand at these auctions could provide an important indication of investor appetite for longer-duration Treasury securities.
Federal Reserve Minutes Could Move Bond Markets
Investors are also awaiting the Federal Reserve’s September meeting minutes.
The release could provide greater insight into the central bank’s interest-rate outlook following its decision to raise rates for the first time in three years.
Bond traders will be looking for signs regarding the pace and scale of any additional monetary tightening.
Any indication that interest rates could remain higher for longer may place additional upward pressure on Treasury yields.
French Bond Yields Rise Again
European government bonds also came under renewed pressure.
France’s bond market gave back some of Tuesday’s temporary gains as investors resumed selling longer-term debt.
The French 10-year government bond yield rose to approximately 4.819%.
The two-year French yield also climbed to around 3.576%, reflecting continued caution toward the country’s fiscal outlook.
France-Germany Bond Spread Widens
The yield gap between French and German government bonds widened again as demand for safer German debt remained relatively stable.
Germany’s 10-year Bund yield held near 3.50%, while the two-year German yield remained around 3.088%.
German bonds continue to benefit from their status as one of the eurozone’s main benchmark safe-haven assets.
The contrast with French debt reflects the higher risk premium investors are demanding to hold French government bonds.
French Fiscal Concerns Remain a Key Risk
France’s borrowing costs have risen sharply amid concerns about the country’s public finances and ongoing political uncertainty.
French bonds briefly recovered on Tuesday following the announcement of a budget proposal aimed at reducing the country’s public deficit to 3% of GDP by 2030.
The proposal included approximately €140 billion in net spending reductions.
However, investors remain cautious about whether such long-term fiscal measures could realistically be implemented.
France’s Budget Deficit Remains Elevated
France’s budget deficit is projected to reach around 5.4% of GDP in 2026.
That remains well above the European Union’s 3% fiscal threshold.
As a result, investors continue to demand higher yields on French government debt compared with German Bunds.
For now, global bond markets remain under pressure as traders balance heavy sovereign borrowing needs, inflation concerns, fiscal uncertainty and expectations surrounding future Federal Reserve policy.
