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G7 Debt under Pressure: Yields Hit Multi-Year Highs as Fiscal Costs Rise Across Advanced Economies
G7 government bond yields are surging to multi-year highs, driven by a $40 trillion US debt milestone, rising interest costs, and investor concerns over fiscal discipline in advanced economies. The world's largest economies are under growing fiscal strain. G7 government bond yields have surged to multi-year highs, with the US 30-year Treasury yield briefly topping 5.33%, its highest level since 2007. This rise is not confined to the US Germany's 10-year yield hit 3.26%, its highest since 2011, while Japan's 10-year yield reached 2.96%, a level not seen in 30 years. "If you lock your money up for 30 years in nominal bonds...there's a higher risk that there will be more inflation in the future...there's that chance that you need to be compensated for when you buy long bonds," said Jamie Patton, a fixed-income portfolio manager at TCW. The $40 Trillion Milestone On August 18, US federal debt crossed $40 trillion for the first time more than doubles its level when President Trump began his first term in January 2017. The US government has run a $1.8 trillion deficit over the first 10 months of the fiscal year, with July alone posting a $432 billion shortfall, the largest monthly g...
