Global bond markets decline sharply as interest rates expected to remain elevated

Global bond markets had their worst month in years in September 2026. Rising energy costs, persistent inflation, and expectations of higher interest rates for longer all pushed bond prices down.

In the United States, two-year Treasury yields rose about 60 basis points, the biggest monthly jump since early 2023. Ten-year yields passed 5% for the first time since 2007. US mortgage rates also climbed to their highest level in more than two years.

Europe and Australia saw similar moves. France, Germany, Britain, and Australia all recorded their largest monthly borrowing cost increases since March. Japanese government bond yields reached near their highest levels in decades.