French Bond Yields Surpass 5% for First Time in 24 Years

The yield on ten-year French government bonds has surpassed five percent, reaching its highest level in 24 years, as investor concerns grow over the country's unstable public finances and violent protests. This marks a significant escalation in market anxiety about France's ability to manage its debt. The yield peaked at 5.002 percent, with the risk premium over German bonds nearing levels last seen in 2011. Chief economist Cyrus de la Rubia cited violent protests, a weakened government without a parliamentary majority, and limited fiscal room to address rising living costs as key factors. No budget is expected before the 2027 presidential election. Yields have risen globally this year due to inflation and higher interest rates, but France's borrowing costs have increased more sharply than most comparable countries. Weekend protests against living costs led to clashes and looting, with 123 people in custody and further demonstrations planned for Saturday.