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[Global Bond Yields Rise to Highest Levels Since 2008] ⑴ Global government borrowing costs have risen to their highest level since the 2008 financial crisis, with the yield on 10-year US Treasury bonds exceeding 5%. ⑵ The average yield on 10-year G7 government bonds reached 4.285%, the highest since mid-2008, a full percentage point higher than before the outbreak of the Middle East conflict. ⑶ The escalating conflict has pushed oil prices back above $100 per barrel, increasing pressure on central banks to raise interest rates to combat inflation, a significant reason for the rise in bond yields. ⑷ The market expects the Federal Reserve to raise interest rates on Wednesday for the first time since 2023, the Bank of Japan is expected to raise rates on Friday, and the European Central Bank raised rates last week and may continue to do so in the coming months. ⑸ Bond sell-offs have increased the cost of new government debt issuance, also increasing interest payments and crowding out funds for social and defense projects, raising questions about the sustainability of the debt burden. ⑹ Some economists point out that if economic growth exceeds the yield, a 5% yield is not a problem, but the situation is different when growth and yield are comparable. (7) The US 10-year Treasury yield, as a global asset pricing benchmark, exceeding 5% puts widespread pressure on sovereign and corporate borrowers. (8) Another problem facing investors is Federal Reserve Chairman Kevin Warsh's aversion to forward guidance, leading to increased uncertainty and volatility. (9) Some market participants point out that central banks have entered a new phase lacking forward guidance and can only rely on building credibility and trust, but the bond market performance shows that this approach is not currently effective. (10) Factors such as artificial intelligence capital expenditure, fiscal anxiety, and the US debt reaching $40 trillion have further exacerbated the complex situation. (11) The yield on Japanese 10-year government bonds broke through 3%, reaching a 30-year high; the benchmark yield on German 10-year bonds approached 3.55%, the highest since 2009; the yield on French 10-year bonds hovered near an 18-year high; and the yield on British 10-year bonds reached 5.45%, the highest since 2007. 12 Some strategists believe that fiscal policy and debt sustainability are crucial to the bond market, but the current rise in US yields does not yet signal an increase in sovereign credit risk; inflation is the fundamental reason for the bond weakness.