Global government bond yields climbed on Thursday amid persistent inflation fears and strong economic growth, sending the 30-year US Treasury yield to 5.48 percent, its highest level since 2004.
Sovereign yields climb across global markets
The 10-year US Treasury yield reached 5.20 percent, having breached the 5 percent threshold earlier in the month, while market participants watch 6 percent as the next potential level. The 10-year yield has climbed 0.70 percentage points since the June Federal Reserve policy meeting and 1.25 percentage points since the beginning of March.
Surging yields pushed the 30-year US mortgage rate to 7 percent, up 1 percentage point compared to its pre-war level. Higher borrowing costs spread abroad as well, with the 10-year German government bond yield reaching a peak of 3.6 percent in the month, marking its highest point in 17 years. Germany projects federal government borrowing of 525.5 billion euros, or 598 billion dollars, for 2026. The 10-year Japanese government bond yield reached its highest level since 1996.
Growth and policy expectations weigh on debt
Nominal US economic growth reached 8 percent in the second quarter of 2026. A conflict involving Iran contributed to higher energy prices and heightened inflation concerns, while expanding government spending added pressure on global bond markets. US Treasury Secretary Scott Bessent took measures to contain borrowing costs, but long-term yields continued to climb.
Fed policy expectations drove yields higher. Gennadiy Goldberg, head of US rates strategy at TD Securities, said most of the yield increase since March stemmed from shifting Federal Reserve policy expectations, with higher growth expectations and higher oil prices driving the remainder.
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