France's 10-year bond yield hits 5% for first time since 2002

The yield on France's benchmark 10-year government bond surpassed 5% on Wednesday for the first time since 2002, as investors demanded higher returns on the country's debt. This surge raises borrowing costs for businesses and households across the economy. French yields have climbed for weeks amid political wrangling over a 2027 budget proposing billions in spending cuts to address debt at roughly 120% of GDP, far above the EU's 60% limit. The spread over German bonds widened to nearly 160 basis points. The selloff pressures the government ahead of a Friday Moody's rating decision, with most economists expecting a downgrade. Prime Minister Sebastien Lecornu lacks a majority for his €43 billion in cuts, and weekend protests over public services turned violent.