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Global Bond Rout Raises Borrowing Costs For Governments And Consumers

The U.S. 30-year Treasury yield climbed to 5.45% Thursday, its highest level since 2004.

Photo by Vladimir Solomianyi / Unsplash

Global bond markets are facing a broad sell-off as rising inflation concerns and expectations of higher interest rates push borrowing costs higher, according to CNN.

The U.S. 30-year Treasury yield climbed to 5.45% Thursday, its highest level since 2004. The 10-year yield reached 5.16%, its highest since 2007.

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Markets are increasingly expecting another Federal Reserve rate increase, with CME FedWatch showing a 64% probability of an October hike, up sharply from 11% a month earlier.

Higher energy prices have added to inflation concerns. Brent crude traded near $107 per barrel as the conflict involving Iran disrupted energy supplies and affected the global economic outlook.

Bond yields also climbed in Europe and Japan. France and Germany saw 10-year yields reach their highest levels since 2008, while Japan’s rose to 3.08%, a level last seen in 1996.

Rising yields increase borrowing costs for households, companies and governments. U.S. stocks also declined, with the S&P 500 falling 0.5% and Nasdaq dropping 0.8%.

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