Selling Pressure on US Bonds and Highest Levels Since 2007

Geopolitical risks stemming from the Middle East and Ukraine, growing concerns over energy supply, and expectations that artificial intelligence investments will accelerate the economy have increased selling pressure in the bond markets, with the 10-year Treasury yield reaching its highest level since 2007.

Geopolitical Risks and Energy Supply

The ongoing tensions in the Middle East and the risks posed by the Russia-Ukraine War continue to threaten energy supply. The targeting of energy facilities in the conflicts increases supply concerns on a global scale and strengthens inflationary pressures.

Artificial Intelligence Investments and Growth

The continuation of investments in artificial intelligence and technology worldwide supports potential growth through increased productivity in economies. This situation is among the main factors increasing volatility in the bond markets.

Central Bank Policies

In September, the Fed went for a rate hike for the first time since 2023, raising the policy rate by 25 basis points in line with expectations to the 3.75-4 percent range. It is notable that inflation concerns remain alive and the demand for real interest rates persists.

Latest Situation in Bond Yields

The US 10-year Treasury yield, which saw its highest level since 2007 at 5.30 percent, leveled off at 5.24 percent. Meanwhile, the US 2-year Treasury yield, which is sensitive to the Fed's policies, increased by over 60 basis points this month, approaching the 5 percent level.

Impacts on Markets and Expert Opinions

Analysts state that bond yields serve as an important reference for global markets and affect the pricing of many financial assets, from stocks to mortgages.

İş Yatırım Deputy General Manager Şant Manukyan emphasized that the increases stem from artificial intelligence and that the Atlanta Fed projects a real growth of around 5 percent in the third quarter.