US Treasury yields hit highest since 2002 as global bond sell-off deepens
BusinessLine 1 hr ago·1 Oct 2026, 2:53 pm
US Treasury yields have surged to their highest levels since 2002, driven by a global bond sell-off. This sharp rise is largely a reaction to persistent inflation and stronger-than-expected economic growth, which has prompted investors to demand higher returns on government debt. Consequently, long-term borrowing costs are climbing across major markets, including India.
For Indian investors, this shift is significant as it raises the benchmark interest rate in the US. A higher US rate often puts upward pressure on domestic interest rates, potentially affecting the returns on fixed deposits and bonds. It also influences the Indian Rupee, which can make imports more expensive and impact the valuation of foreign assets.
Moving forward, investors should watch the Federal Reserve's policy decisions closely. If inflation remains sticky, further rate hikes could be on the horizon. This scenario would likely keep global bond yields elevated, creating a challenging environment for fixed-income investments and increasing the importance of diversifying one's portfolio.
Excerpt from BusinessLine
L Global bonds were engulfed by heavy selling again on Thursday sending borrowing costs from the US to France and Japan surging to levels not seen in decades in a warning to policymakers. Higher rates raise financing costs for companies and mortgage borrowers and force governments to spend more on interest payments,…Read the original at BusinessLine
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