A global bond sell-off intensified on Wednesday, pushing the yield on the 30-year US Treasury to 5% for the first time since July. The surge reflects investors’ growing concerns over mounting government debt and persistent inflation pressures. Longer-term bonds were hardest hit, with Japan’s 30-year yield climbing to a record 3.29% and the UK’s 30-year gilt yield rising to 5.75%, its highest level in decades. The upheaval highlights a growing challenge for major economies trying to balance fiscal stability with the need to sustain growth. “It’s almost a perfect storm of concerns over current fiscal policies becoming inflationary, potentially more global issuance and not enough demand,” said Mitul Kotecha, head of emerging markets macro strategy at Barclays. Fears over the US fiscal outlook resurfaced after an appeals court ruled most of former President Donald Trump’s tariffs illegal, a move that could erase hundreds of billions in government revenue. The Congressional Budget Office previously estimated that the tariffs would reduce US deficits by $4 trillion over the next decade. “Sovereign assets are becoming more risky because there are fewer guardrails for politicians, they need to increase budget deficits and have lower rates,” warned Alicia García-Herrero, chief Apac economist at Natixis. The bond market turmoil rippled into equities, with Japan’s Topix down 1.2% and Australia’s S&P/ASX 200 sliding 1.8%. On Wall Street, the Nasdaq dropped 1.2% and the S&P 500 fell 0.6%, underscoring the global strain across financial markets.
UK & Japan Face Record Yields as Market Turmoil Shakes Stocks Worldwide
