Global bond markets are under heavy selling pressure as investors increase bets that the U.S. Federal Reserve (Fed) may need to raise interest rates again to tackle inflation that is not easing as quickly as expected. This selling has pushed U.S. Treasury yields to their highest levels in decades.
Most recently, on Thursday, 24 Nov 2026 GMT+7, the 30-year U.S. Treasury yield hit an intraday high of 5.501%, the highest since June 2004, while the 10-year yield jumped more than 10 basis points to 5.223%, the highest since June 2007. The 2-year yield rose over 4 basis points to 4.941%.
This move follows heavy selling on Wednesday, when the 10-year yield rose the most in a single day since 7 April 2025, a period marked by market turmoil after President Trump announced the "Liberation Day" import tax.
Bond prices and yields move inversely; when bonds are heavily sold, their prices fall, so new buyers receive higher returns relative to the price paid. Therefore, yields spike on days when bonds face strong selling pressure.
The key turning point is the market starting to anticipate U.S. interest rates will need to be higher than previously expected, driven by several concurrent factors.
The first factor is economic data: S&P Global’s Purchasing Managers’ Index (PMI) came in stronger than expected, indicating the U.S. economy is still expanding well and price pressures are broadening.
The second factor is oil prices, which are approaching $100 per barrel after President Trump signaled support for a U.S. diesel export ban. Brent crude closed above $105 per barrel.
The third factor is Fed officials’ stance, who remain focused on controlling inflation. Fed Governor Michael Barr said further policy adjustments might be needed to bring inflation back to target. John Williams, President of the New York Fed, described expectations for another rate hike by year-end as a "reasonable" assumption.
Data from the CME Group FedWatch Tool on 24 September shows the market now assigns over a 75% probability of a Fed rate hike at the October meeting, up sharply from about 49% a week earlier.
The selling pressure is not limited to the U.S. but has spread globally. The 10-year Japanese government bond yield reached its highest level since August 1996, while yields on UK, German, and other European government bonds have also risen.
Mike Sanders, head of fixed income at Madison Investments, said the current situation results from multiple pressures converging, including fiscal policy, economic factors, geopolitics, and supply-driven inflation, pushing bond markets into unfamiliar territory. The recent yield increases can no longer be explained solely by concerns over budget deficits.
The critical point is that U.S. bond yields are not just numbers in the bond market; they serve as the "base price of money" in the global financial system. In particular, the 10-year U.S. Treasury yield influences many financing costs, from mortgage rates to corporate funding costs. When yields rise, the effects ripple throughout the economy.
If the market believes the Fed must raise rates further or keep them high longer than expected, borrowing costs are likely to remain elevated. Higher borrowing costs will increase interest expenses for companies with significant investment needs or debt, impacting profits, investments, and business expansion.
Additionally, when 10- to 30-year U.S. Treasury yields exceed 5%, investors reconsider whether the extra risk of investing in stocks is justified. As yields rise, stocks and other risky assets must offer higher expected returns to attract investment.
As U.S. Treasury yields rise, global investors are increasingly attracted to dollar-denominated assets. The U.S. dollar recently strengthened to an eight-week high, which may pressure capital flows into emerging markets, including the Thai currency and stock market, though actual outcomes depend on other factors as well.
Therefore, market concerns extend beyond the 30-year Treasury yield reaching its highest since 2004 to the possibility that the world faces a longer period of high interest rates than anticipated. If the Fed raises rates further, the effects could spread beyond bonds to borrowing costs, business investment, stock prices, currencies, and risky assets worldwide.
ReferencesCNBC,AXIOS,Yahoo Finance