Government bonds extended their global sell-off on Wednesday, driving borrowing costs to multi-decade highs as investors grew increasingly concerned about resurgent inflation and the fiscal health of major economies.
The yield on Germany’s 10-year bund, the benchmark for the euro area, rose 4 basis points to 3.375% on Wednesday morning — its highest level since 2011, according to CNBC. Japan’s 10-year yield stood at 3.016%, a day after crossing the 3% threshold for the first time in three decades. In the U.S., the 10-year Treasury yield remained above 4.8%, a level last topped in early 2025, while Britain’s 10-year gilt extended its post-2008 high to 5.25%. Yields move inversely to prices.
Inflation and geopolitical pressures
The rout has been fueled by a resurgence of inflationary pressures, particularly as a fresh wave of conflict in the Middle East pushes oil prices higher. That has compounded long-standing worries about the hefty debt loads and widening fiscal deficits of governments from Washington to Tokyo and Paris.
Central banks are also seen preparing for a wave of interest rate hikes this month, which typically weighs on bond prices. Federal Reserve Chair Kevin Warsh struck a hawkish tone in his closely watched speech in Jackson Hole last week, according to CNBC. The Bank of Japan is viewed as potentially raising rates to support a weakening yen, and markets are fully pricing in a rate increase by the European Central Bank following the release of euro-area inflation data on Tuesday.
Equities slip into risk-off mode
The bond-market turmoil has spilled into equities, with major U.S. indices falling for three straight sessions and European and Asian markets also trading lower. The pullback comes after a strong year that saw many stock markets hit record highs, driven by enthusiasm around the AI boom despite the volatile geopolitical backdrop.
George Maris, chief investment officer and global head of equities at Principal Asset Management, told CNBC’s “Squawk Box Europe” that the fundamental underpinnings of markets are “a little shakier than they’ve been.”
“And if the cost of money, the cost of risk rises, that’s what you’re seeing with the global rise in yields everywhere,” Maris said. He pointed to debt levels around the world that are “at stratospheric levels and increasing,” adding that “the solutions for curing that do not seem readily apparent” and that he does not see “the political willingness to tackle this anywhere.”
“I think that’s a problem,” he said. “I think the fact that this is all happening in a period of healthy global economic growth, that you’re seeing the debt levels pick up, means that we’re in a more precarious place for if there’s disturbance.”
Source: www.cnbc.com — https://www.cnbc.com/2026/09/02/global-bond-yields-inflation-rates.html
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