- Government borrowing costs are climbing globally as investors demand more compensation to hold longer-maturity debt, with US 10-year Treasury yields breaching 5% for the first time in almost two decades.
- Treasury Secretary Scott Bessent announced expanded buybacks of long-dated government debt, but the intervention failed to stop the rise in yields.
- The retreat from long-dated sovereign debt reflects mounting fiscal deficits and stubborn inflation, amplified by President Donald Trump’s trade war and higher energy costs from the Middle East conflict.
Quotes
“Government borrowing costs have been climbing around the world as investors demand more compensation to entice them to hold longer-maturity debt.”
“an intervention that failed to stop yields on 10-year Treasuries from breaching 5% and hitting their highest level in almost two decades”
“Investors’ retreat from long-dated sovereign debt has been driven by a range of concerns.”