Bond Markets Suffer Sharp Decline as 10-Year Treasury Yields Hit 2002 Levels

Global bond markets face heavy selling, with 10-year Treasury yields hitting 5.34%—their highest since 2002.

October 1, 2026 One Min Read

POLICY WIRE — LONDON/SINGAPORE — Global bond markets experienced another wave of heavy selling on Thursday, with government borrowing costs in the U.S., France, and Japan reaching levels not seen in decades. The 10-year U.S. Treasury yield surged to 5.34%, marking its highest level since 2002.

The sharp increase in bond yields has shaken stock markets, particularly in Europe, where the STOXX 600 index hit a low not seen since June. Meanwhile, the S&P 500 futures showed only slight gains. Rising yields reflect broader concerns over inflation, economic growth, and shifting expectations about future interest rates.

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France’s bond market faced significant pressure as the 10-year OAT yield climbed to 4.96%, nearing the 5% threshold. This follows a record quarterly drop in performance for French bonds between June and September. Analysts point to budgetary challenges and weak investor confidence as key factors driving the selloff. Globally, central banks are under pressure to maintain monetary discipline amid rising borrowing costs and financial strain on governments and businesses.

Reporting by Policy-Wire (PW)

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