Battered bond market braces for a new era of interest rates
Yields on U.S. and European debt rose nearly 60 basis points in September as investors braced for higher borrowing costs and heavier bond supply.
- Global bond markets are heading for their worst month in years as soaring energy costs and the AI boom leave investors positioning for an era where interest rates stay higher for longer.
- Hyperscalers have issued over $200 billion in bonds this year, forcing governments to compete for capital and driving borrowing costs higher across the economy.
- Treasury Secretary Scott Bessent announced a $6 billion buyback program to address US debt exceeding $40 trillion, though 10-year Treasury yields have already pushed above 5% for the first time since 2007.
- The ICE BofA MOVE Index jumped almost 30% in September, the largest increase since March, as Societe Generale's head of corporate research for FX and rates Kenneth Broux said, "There's a realisation that the whole energy story and inflation story will not go away in the very short term."
- Politicians face an uncomfortable choice between taking difficult decisions today to reassure bond markets or postponing them, risking higher borrowing costs tomorrow, as fiscal woes persist across Europe and the United States.
13 Articles
13 Articles
AI has made borrowing more expensive – an expert explains how bond markets are changing
Sven Hansche/ShutterstockThe global bond markets are a sensitive lot. And they’ve been having a particularly tricky time lately. Spooked by high inflation, high interest rates and high levels of government debt across the world, those markets have become less stable over the summer. The prices of government bonds – what governments sell to investors – have gone down. And yields – the amount of interest governments need to pay to those investors …
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Global Bond Markets Brace for Higher-for-Longer Interest Rates as Energy Costs Climb
Global sovereign bond markets are on track for one of their weakest months in years as rising energy costs fuel inflation concerns, while strong artificial ... The post Global Bond Markets Brace for Higher-for-Longer Interest Rates as Energy Costs Climb first appeared on [your]NEWS.
Battered bond market braces for a new era of interest rates
The world's biggest sovereign bond markets are heading for their worst month in years as soaring energy costs fan inflation and the AI boom lifts economic growth, leaving investors positioning for an era where interest rates stay higher for longer.
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