Important Data on Global Yields
Global bond markets are showing a very worrying trend.
The 30-year yields in the US, UK, Germany, France, and Italy are moving sharply higher. This shift is not a small event. It is the result of rising debt levels in major economies combined with an aging population. For nearly 40 years, from the 1980s till 2020, Western countries enjoyed lower yields. That long cycle now seems to be over, and yields are climbing.
Rising Yields Across Major Economies
The increase in yields is not limited to one or two countries. US, UK, France, Italy, Germany, and even Japan are all seeing yields move higher. The only exception is Switzerland, where yields are still near zero. Switzerland avoided joining the Euro and has remained independently strong. But apart from that, the global picture is very clear: bond yields are on the rise everywhere.
Fed Rate Cuts Not Slowing Yields
What makes the situation more unusual is that yields are rising even though rate cuts are expected soon. Normally, such cuts would bring yields down. But this time, the bond market and the central bank are moving in different directions. The US Federal Reserve is trying to guide yields lower, but the market is refusing to follow. This shows that investors now see the market as risky and demand higher yields to take on that risk.
When the Market Refuses Guidance
This type of divergence is dangerous. It shows the market has stopped listening to government signals and is setting its own course. If yields move from the current 4–5% level toward 10%, it could break the financial system. Such a rise would be a nightmare scenario and something that could force the Fed to take emergency action.
Possible Steps to Control Yields
The only way to control the situation may be through large-scale intervention. That could mean buying back a huge amount of bonds from the market, or convincing allies to buy them. Heavy buying pressure would bring yields down. But right now, the opposite is happening. Countries are selling US treasury bonds instead of buying them. More selling means bond prices keep dropping, and bond yields keep rising.
Preparing for Global Impact
This is turning into a runaway train that could end in a crash if not handled carefully. If global yields continue rising unchecked, the shock will spread everywhere. While Indian bond yields are not directly tied to Western ones, a big global blow-up will surely affect India too. It is important for investors to think about asset allocation and stay protected in case of sudden events.
