{"id":129905,"date":"2025-09-03T14:39:06","date_gmt":"2025-09-03T14:39:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/129905\/"},"modified":"2025-09-03T14:39:06","modified_gmt":"2025-09-03T14:39:06","slug":"us-uk-france-bond-yields-tip-higher-amid-national-debt-concerns","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/129905\/","title":{"rendered":"US, UK, France bond yields tip higher amid national debt concerns"},"content":{"rendered":"

As traders head into the final leg of 2025 they are not doing so with overconfidence. In fact, if this week\u2019s bond market is anything to go by<\/a>, they\u2019re nervous. <\/p>\n

U.S. 30-year Treasuries will open a breath away from 5%<\/a> today, one of their highest levels this year, following a sharp uptick since the end of last month. While yields pushing higher is one sign of a selloff, another is trading activity. That too has ticked up, increasing approximately 19% year-on-year at the end of August according to securities experts Sifma. <\/a><\/p>\n

But the upset isn\u2019t confined to America alone. In Europe, French government bonds\u2014Obligations Assimilables du Tr\u00e9sor or OATs\u2014similarly spiked toward a 5% yield<\/a> and sit at 4.49% at the time of writing, marking its highest run since 2009.<\/p>\n

The U.K. is arguably feeling the sharpest end of the issue, with 30-year gilts<\/a> pushing above 5.7%, their highest level since the spring of 1998.<\/p>\n

Meanwhile, gold, the safe haven asset in times of economic upheaval, has hit a record price of $3,537.<\/a><\/p>\n

One reason investors are drawing back from government debt is concerns over its sustainability. For years economists have been nervously watching the debt-to-GDP ratios of developed economies tip further out of balance, meaning nations aren\u2019t generating the growth to keep up with the borrowing they have financed.<\/p>\n

If that ratio tips too far out of balance, or if investors see no signs of governments addressing the issue, experts fear there will be a flight from government securities as buyers demand higher yield premiums in return for their debt purchases. This could prompt a range of outcomes, with either central banks forced to step in to ease money supply or political pressure mounting to the point of significant cost cutting.<\/p>\n

Investors won\u2019t be cajoled by pressure from the Oval Office to continue buying either, said Desmond Lachman, a senior fellow at the American Enterprise Institute. He told\u00a0Fortune\u00a0in an exclusive interview last month<\/a>:\u00a0\u201cA comment I think is great is: One thing about the bond markets is that they can\u2019t be primaried.\u00a0In bond markets, the money\u2019s gonna move. People just want to protect their cash; they\u2019re not afraid of being bullied by Trump if the numbers don\u2019t add up.\u201d<\/p>\n

Deutsche Bank<\/a> noted to clients this morning that the French deficit running at 5.6\u20135.8% of GDP in 2025, above the official 5.4% target, which is fueling concerns around debt sustainability. Likewise in the U.K., Deutsche\u2019s Jim Reid noted that the government has a \u00a320\u2013\u00a325 billion budget gap to fill by November, compounding questions about how seriously global governments are taking their spending.<\/p>\n

The Fed question<\/p>\n

The picture in the U.S. is slightly more complicated, but boils down to confidence in the fundamentals of America\u2019s economy. As Reid notes: \u201cConcerns around Fed independence also contributed to the bond market moves.\u00a0A second court hearing began yesterday on whether President Trump can be temporarily barred from dismissing Fed Governor Lisa Cook \u2026 Earlier, nearly 600 economists signed an open letter in Cook\u2019s defence, while FHFA Director Bill Pulte kept up accusations of mortgage fraud.\u201d<\/p>\n

\u201cMeanwhile,\u00a0Treasury Secretary Scott Bessent confirmed the search for Powell\u2019s successor as Fed Chair is already underway \u2026 In comments to Reuters, he stressed that the Fed \u2018should remain independent,\u2019 though he was quick to add that it has also \u2018made a lot of mistakes.’\u201d<\/p>\n

With Bessent and Trump continuing to pressure the Fed for lower interest rates\u2014and with economic data suggesting this may soon be appropriate\u2014treasury yields on the shorter end are lowering in anticipation of cheaper borrowing. <\/p>\n

5 year yields, for example, are at 3.74%<\/a> down significantly from earlier this year when they sat at more than 4.6%. <\/p>\n

Goldman Sachs noted the widening of the gap between short and long term yields, writing to clients Friday: \u201cDespite relative stability at the very front-end of the U.S. curve, cut pricing in 2026 has continued to build alongside a rise in risk premium at the long-end.\u201d <\/p>\n

Oxford Economics\u2019s John Canavan echoed in a note yesterday: \u201cSupply pressures also argue for continued upward pressure on term premiums. Treasury Secretary Scott Bessent has suggested the Treasury avoid increasing the size of long-end Treasury issuance unless rates move lower, but the Treasury still needs to raise much more than is maturing for the 10-year and bond auction cycles each month, even if the auction sizes remain steady. <\/p>\n

\u201cMarket participants might be taking some comfort in a recent\u00a0Congressional Budget Office forecast\u00a0that the increase in tariffs will reduce deficits over the next 10 years by a total of around $4tn, but\u00a0we think\u00a0the effective tariff rate will be lower than that assumed by the CBO, which means the impact on deficits will be smaller. If deficits are larger than expected, the upward pressure on the term premium is likely to increase regardless of the specific monthly 10-year and bond auction sizes.\u201d\n<\/p>\n

Fortune Global Forum returns Oct. 26\u201327, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"As traders head into the final leg of 2025 they are not doing so with overconfidence. In fact,…\n","protected":false},"author":2,"featured_media":129906,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[4592,28,939,15492,2928,30046],"class_list":{"0":"post-129905","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-bonds","9":"tag-business","10":"tag-finance","11":"tag-government-debt","12":"tag-national-debt","13":"tag-u-s-debt"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/129905","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=129905"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/129905\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/129906"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=129905"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=129905"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=129905"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}