United States Treasury yields were little changed on Monday as investors paused following last week’s sharp global bond selloff that pushed borrowing costs significantly higher across major economies.
The benchmark 10-year U.S. Treasury yield, a key measure for government borrowing costs and broader financial markets, ticked 0.3% lower to 4.585% after earlier touching its highest level in 15 months.
Meanwhile, the longer-dated 30-year Treasury bond yield rose 4 basis points to 5.133%. The yield had reached its highest level in almost a year during last week’s bond market turmoil.
The 2-year Treasury note yield, which is closely tied to expectations for Federal Reserve interest rate policy, slipped 0.8% to 4.046%.
One basis point equals 0.01%, while bond yields and prices move inversely.
Elevated Treasury yields have intensified concerns among investors as higher borrowing costs can weigh on corporate earnings, consumer spending and broader economic growth.
Rising bond yields can also pressure equity markets by making fixed-income investments more attractive relative to stocks, particularly as sharemarket valuations remain historically elevated.
According to LSEG Datastream figures cited by Reuters, the S&P 500 was trading at 21.3 times forward earnings estimates as of last Thursday, well above its long-term average forward price-to-earnings ratio of 16.
However, valuations remain below the 23.5 multiple reached in October, with stronger earnings expectations helping support equity prices despite the rise in yields.
Treasury yields surged last week as deteriorating negotiations between the United States and Iran fuelled concerns over inflation, particularly as oil prices remained elevated amid tensions surrounding the Strait of Hormuz.
Fresh U.S. economic data also pointed to increasing price pressures filtering through to consumers, further reinforcing expectations that inflation could remain persistent.
U.S. Treasury Secretary Scott Bessent met with fellow G7 finance ministers and central bankers in Paris on Monday as policymakers grapple with rising inflation risks and mounting public debt concerns.
Asked whether she was concerned about heightened volatility in bond markets, European Central Bank President Christine Lagarde replied: “I always worry, that’s my job.”
The rise in yields has extended well beyond the United States.
Germany’s 10-year bund yield climbed to its highest level since May 2011, while Japan’s 10-year government bond yield reached its highest level since May 1997.
Japan’s 30-year government bond yield rose to a record high dating back to 1999, reflecting growing investor concerns around inflation and debt sustainability.
In the United Kingdom, the benchmark 10-year gilt yield climbed to its highest level since July 2008, while the 30-year gilt yield reached levels not seen since March 1998.
British bond yields have remained elevated amid political uncertainty surrounding Prime Minister Keir Starmer and concerns over the country’s fiscal outlook.
