Global bond sell-off deepens as 10-year Treasury yield hits highest since 2002
Japanese and Australian sovereign debt costs mount despite oil price dipping
Source: Financial Times
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DW NOTE
Treasury yields at 2002 highs while the Gulf is closed and the Fed is raising rates into a supply shock — this is the market pricing fiscal unsustainability, not just inflation risk. The U.S. ran a $1.4 trillion deficit through June even before war costs mounted, and now bondholders are demanding compensation for holding paper whose real value the issuer cannot credibly defend. Japan and Australia face the same reckoning: their central banks can't tighten into a global energy crisis without breaking something, but they can't ease without destroying their currencies. Oil is down 19% from its peak despite Hormuz being effectively shut for eight months because demand is collapsing faster than supply — that's not a geopolitical premium fading, that's a recession forming in real time.