Leading economies’ borrowing costs hit highest since 2008 crisis
Summary
Government borrowing costs have reached their highest levels since the 2008 financial crisis in several major economies, including the US, France, Germany, Japan, and the UK. Investors are worried that ongoing inflation and the Middle East crisis will force central banks to keep raising interest rates, which makes borrowing more expensive for these governments.Key Facts
- The 30-year bond yield in France rose to 4.8558%, the highest since September 2008.
- Germany’s 10-year bond yield reached its highest since 2011 at 3.2138%.
- US 30-year Treasury yield climbed to 5.29%, the highest since 2007.
- Japan’s 10-year government bond yield hit 2.93%, a 30-year high, reflecting expectations of interest rate increases.
- Investors fear that central banks will continue raising interest rates to control inflation.
- The Middle East crisis pushed up oil prices by 6%, adding to inflation concerns.
- The European Central Bank is expected to raise interest rates soon, with almost 85% probability indicated by markets.
- UK and Italian government bond prices fell as bond yields rose, which happens when investors demand higher returns.
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