US bond markets haunted by 6 percent

The article indicates that PIMCO warned that the yields on 10-year U.S. Treasury bonds could reach 6% for the first time in 26 years, driven by concerns over high inflation, rising oil prices, and increasing U.S. public debt. Experts anticipate that this rise in yields could continue, especially as investors are compelled to sell bonds forcefully, leading to a wave of declines in stock and corporate bond prices. Data shows that current U.S. bond yields are surpassing levels not seen since the early 2000s, adding pressure on the stock market and increasing borrowing costs—particularly with mortgage rates rising to 7.4%, the highest since 2023. Additionally, analysts expect that a sustained increase in yields may gradually cause problems in sectors such as commercial real estate and prompt investors to increase their holdings of Treasury securities, although this could limit future yield rises. On the other hand, they pointed out alternative investment options in debt markets outside the United States, such as Australia and the United Kingdom, which offer attractive returns amid volatility regarding the U.S. ability to finance its fiscal deficit in the near term.

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