France's rising borrowing costs signal trouble for household finances

France briefly borrowed at over 5% on ten-year bonds on Wednesday, a first since 2002, reflecting investor doubts about the country's ability to fix its finances after weekend violence and pillaging. Economists widely expect Moody's to downgrade France's debt rating on Friday, aligning with Standard & Poor's and Fitch. The current Aa3 rating with a negative outlook may be cut, impacting public finances and credit conditions for households and businesses. Rising rates will likely push mortgage rates above 4% by early 2027, complicating homeownership, while consumer loans could reach 7-7.5%. Banks face losses on bond holdings, potentially tightening credit, and corporate investment may suffer with higher borrowing costs.