Global bond yields reach decade highs on inflation fears
Sovereign bond yields are reaching decade highs as the war in Iran fuels inflation. Investors worry central banks will raise rates, hitting public spending.
G7 sovereign bond yields surged to decade highs on Monday as war in Iran fueled fears of a lasting inflationary shock. The average 10-year borrowing rate for the world's wealthiest nations climbed to nearly 4%, up from 3.2% in late February. Rising debt costs threaten to erode the fiscal power of governments and corporations.
### Why the 5% Yield Threshold Matters The 10-year United States Treasury note yield reached 4.631% on Monday, its highest level since February 2025. Yields rise when bond prices fall. Markets are now pricing in a 50% chance the Federal Reserve will raise interest rates by December, a sharp reversal from previous expectations of rate cuts. Brandywine Global Investment Management portfolio manager Jack McIntyre said equity markets are paying close attention as yields approach the 5% mark.
