The current bond yields and rate hikes mark decades-high borrowing costs, driven by Fed and BOJ hikes, $100 oil and heavy AI-linked debt issuance. The world's borrowing costs are breaking records not seen in a generation!
the US 10-year actually closed Friday at 5.18%, the highest since the global financial crisis. The 30-year is around 5.5%, a level last seen in 2004. Japan's 10-year yield touched roughly 3.08% this week, the highest since 1996, and Australian yields are pressing against a 15-year peak.
The drivers stack up: a Federal Reserve that has just delivered its first hike in three years (markets see roughly a two-in-three chance of another in October), oil stuck above $100, and a flood of corporate debt as tech giants borrow to fund AI build-outs. Hyperscaler bond sales have more than doubled this year to over $200 billion, competing directly with governments for capital.
In Tokyo, the BOJ lifted its policy rate to 1.25% on 18 September, the highest since 1995, in a 7–2 split vote. A former board member now expects hikes roughly every quarter, taking rates to 2% by around mid-2027.
The era of free money isn't just over; it's being actively reversed.