Global Bond Yields Hit Highest Level Since 2008 as Fed Decision Looms

Average yields on the Bloomberg Global Treasury Index climbed to 3.68%, the highest level since the 2008 global financial crisis. The selloff lands days before rate decisions from the Federal Reserve, Bank of Japan, and Bank of England.

The index tracks government debt from investment-grade countries. It is heading for its biggest monthly drop since March, challenging hopes that the worst of this year’s bond rout has passed.

Global Bond Yields Surge Across Every Major Market

US 30-year Treasury yields trade just below their highest level since 2007. UK gilts have logged their longest streak of daily closes above 5% in almost two decades, according to Bloomberg.

Germany’s 10-year yield has reached its highest point since 2011. Meanwhile, Japan’s 40-year yield moved above 4%, and its five-year yield hit a record since the maturity launched in 2000. Australia now carries the highest benchmark yields in the developed world.

Bond prices fall when yields rise, so the pain shows up in funds. BlackRock’s iShares 20+ Year Treasury Bond ETF fell almost 5% in one month. The fund has lost more than half its value since 2020, while the global benchmark sits roughly 20% below its early-2021 peak.

Why the Selloff Refuses to Cool

Strong US employment and growth data flipped rate expectations from cuts to possible hikes. Traders assign roughly a one-in-three probability to a hike at the July 28-29 meeting, where a split among 104 economists shows how uncertain the path remains.

Fed Chairman Kevin Warsh has also cut back on forward guidance. Consequently, the ICE BofA MOVE Index, which measures bond market volatility, hit a two-month high on Thursday.

Bank of America said less guidance lets markets price the action they believe the Fed should take. Barclays warned that a hike, or a poorly explained hold, could push parts of the curve higher.

Energy added pressure earlier in the week. Brent crude broke above $100 on Thursday, reviving inflation fears, before it fell 7% on Sunday after Iran signaled a pause, while gold climbed above $4,100.

What Rising Yields Mean for Crypto

Higher government bond yields raise the risk-free rate that every other asset must beat. That pressures equity valuations, corporate borrowing costs, and governments carrying heavy debt loads.

Moody’s believes markets may have entered a period of structurally higher inflation, higher rates, and wider fiscal deficits. For crypto, that cuts both ways. Expensive money competes for capital, yet fiscal stress strengthens the case for hard assets.

Bitcoin (BTC) has held firm so far, trading near $65,157, up 1.3% over the past day. Whether that resilience holds depends partly on how two central banks act this week.

Wednesday’s Fed decision will show whether bond markets have priced policy correctly, or whether yields have further to climb.