A global bond rout: why it reaches your EMI (opens the source in a new tab)
- The US Bond yield The annual return a bond pays at today's price; rising yields mean borrowing is getting dearer. closed at 5.29% on 30 September, the highest since 2002; Britain’s 30-year topped 6% for the first time since 1998, and France’s 10-year hit a near 25-year high.
- Three causes at once: costly oil reviving inflation fears, the US Fed raising rates again on 16 September, and governments borrowing more than lenders like.
- India’s 10-year is about 7.2%, near a two-year high; a one-point rise on a ₹50 lakh, 20-year home loan adds about ₹3,100 a month.
- 5.29%
- US 10-yr, 2002 high
- 6%+
- UK 30-yr, since 1998
- ~7.2%
- India, ~2-yr high
Why it matters Government yields set the floor for every loan, so borrowing costs rise without any central bank acting.
Other side Savers get better rates on new deposits and bonds, and emerging markets, India included, have held up better so far. A crisis, or a reset to normal rates?