Global Bond Yields Hit Multidecade Highs as Selloff Deepens — SkimNews
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- Long-duration government yields have jumped to multidecade highs globally, with the U.S. 10-year Treasury above 5.6%, Japan's 10-year near 3%, and Britain's 30-year above 6%, signalling a synchronized loss of confidence in fiscal and monetary fundamentals.
- The U.S. Treasury tripled its bond buyback program from US$2-billion to US$6-billion shortly before midterm elections, a move many investors concluded was aimed at minimizing interest rate increases rather than boosting liquidity — and the program has not lowered long-term rates.
- Treasury Secretary Scott Bessent has faced public criticism from his former mentor Stanley Druckenmiller, who warned in an opinion piece last month that governments defending prices against fundamentals always lose.
- Higher U.S. interest rates have rippled through global markets via currency movements, capital flows, and imported inflation, pressuring other central banks as Japan's shift away from ultra-low rates and persistent European inflation threaten to intensify volatility.
- Balanced portfolios that rely on fixed income to cushion equity drawdowns have instead seen both asset classes fall simultaneously, a repeat of the 2022 pattern, as credit-fund outflows compound the damage.
- Central banks are expected to stay overly hawkish after misreading the post-pandemic inflationary cycle, with the author warning that keeping rates high too long could expose deeper fiscal vulnerabilities across developed economies.
Why it matters: Bond and equity holders are losing money at the same time — a rare 2022-style dual hit — while the U.S. Treasury's tripling of its buyback program to US$6-billion has failed to slow the rise in long-term yields, drawing political fire ahead of midterms and testing the credibility of fiscal authorities in the U.S., Britain, and Japan simultaneously.
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