(21 August 2026 – Global) A widespread global government bond sell-off has rocked global debt markets and sent long-term yields to their highest levels in decades.
In the US, the 30-year US Treasury bond yield surpassed 5.31 percent, the highest rate since the 2007 Global Financial Crisis (GFC). The yield for ten year US Treasury bonds, a crucial financial benchmark, jumped to 4.7 percent as long term yields climbed in Australia, Germany, France, Japan and the United Kingdom (UK).
Inflation in the US currently stands at 3.4 percent, well above the Federal Reserve’s two percent target. The inflation rate in the UK and Germany was 2.9 percent and 2.8 percent, respectively. In Japan, 30-year yields have risen above four percent for the first time in their 27-year history.
The Reserve Bank of Australia (RBA) forecasts prices to continue to grow at a rate above the midpoint of the central bank’s two to three percent target range for at least the next 18 months as the 30-year government bond yield has jumped 18 basis points in the last month to 5.63 percent.
The surge in bond yields has occurred as investors confront multiple headwinds including persistent inflation and rising government debt as the US Treasury announced it would increase debt buybacks in an attempt to relieve pressure on long term yields.
Bond markets are being pressured by a surge of heavy borrowing by companies, including businesses seeking capital for data centre investment and AI-related projects. In the US, corporates have issued almost US$1.7 trillion in corporate bonds this year, an increase of 27 percent year-on-year.
The US national debt is on track to surpass US$50 trillion by 2029, and the US has spent about$U$S1.4 trillion on interest payments in the past year.
US President Trump has even declared war on bond yields stating “We have many types of intervention. That’s one. The ultimate intervention is our military. And if we have to use that, we will.”
“When Trump implies the US military effectively backs the bond market, he’s not wrong. If you think that the military can or can’t project US power globally as it once did, that matters vastly for market dynamics” stated Rabobank Chief Strategist, Michael Every.
“Borrowing by governments and companies hit a record in 2025 and is set to rise again in 2026, even as long-duration demand weakens and maturities shorten” the World Economic Forum (WEF) noted in its latest Chief Economists’ Outlook.