Brief
French bond yields top US Treasury rates as budget deadlock fuels market sell‑off
The French 10‑year OAT hit 5.089%, breaking the 5% barrier and overtaking US Treasury yields amid parliamentary gridlock and street unrest.
By Felo News Desk · Published
France's 10‑year government bond yield rose to 5.089% on Thursday, its highest since July 2022, pushing French borrowing costs above those of US Treasury bonds for the first time since 2013, the Guardian reported.
The spread between French and German 10‑year yields widened to a near‑15‑year peak, reflecting heightened risk premium as the government struggles to pass a budget for next year. The yield crossed the 5% threshold on Wednesday, a level not seen since 2002.
Market analysts linked the sell‑off to political uncertainty. Jim Reid, a market strategist at Deutsche Bank, said the French bond sell‑off was beginning to affect other European markets. Carsten Brzeski of ING noted that rising yields reinforce the European Central Bank's restrictive stance ahead of its upcoming rate decision.
Domestic unrest has intensified the fiscal pressure. Tens of thousands marched demanding better school funding, while clashes with police in Paris, Bordeaux, Nice and Marseille led to looting, attacks on public buildings and nearly 2,400 arrests, according to the interior ministry.
Parliamentary gridlock has stalled President Emmanuel Macron's plan to raise the state pension age from 62 to 64 and other spending‑containment measures. France's budget deficit stood at 5.1% of GDP in 2025 and public debt at 115.6% of GDP, the article noted.
Key facts
- French 10‑year OAT yield rose to 5.089% on Thursday, its highest since July 2022. (theguardian.com)
- The French‑German 10‑year spread reached its highest level in almost 15 years. (theguardian.com)
- French yields overtook US Treasury yields for the first time since 2013. (theguardian.com)
- France's budget deficit was 5.1% of GDP in 2025 and debt 115.6% of GDP. (theguardian.com)
- Nearly 2,400 arrests were made during recent protests, according to the interior ministry. (theguardian.com)
Sources
- [1] theguardian.com — originally reported as “French borrowing costs overtake US amid budget turmoil”
