When longer-term yields jump, they feed into mortgages, auto loans and credit card rates, squeezing households and broader economies. Rising yields overseas may also dampen demand for US bonds.
Japan, France and the UK are among 18 developed nations that saw a bigger 30-year yield jump than the US this year, threatening demand for US Treasuries and equities. The rise in Japan was 99 basis points, and in the UK the yield closed on Sept. 2 at 5.69%, the highest since May 1998.
In September, yields on 30-year sovereigns climbed above the S&P 500 earnings yield in the UK, US and France. The so-called “risk-free benchmarks” are unusually high and have raised doubts over equity valuations following a three-year stock rally.
