French Bond Yields Climb
France’s 10-year OAT yield rebounded above 4.85%, tracking higher US Treasury yields after stronger-than-expected US inflation data reinforced expectations of further Federal Reserve tightening. ECB President Christine Lagarde said energy-driven inflation has yet to spread across the wider euro area, supporting a wait-and-see approach. However, persistent price pressures and the ongoing US-Iran conflict have strengthened expectations of another ECB rate hike in December, following two increases earlier this year. French borrowing costs remain near their highest levels in over two decades, as record public debt and political hurdles complicate fiscal consolidation. The government aims to cut the budget deficit to 5% of GDP by 2027, but parliamentary support for significant spending cuts remains uncertain ahead of next year’s presidential election.
85%, tracking higher US Treasury yields after stronger-than-expected US inflation data reinforced expectations of further Federal Reserve tightening. ECB President Christine Lagarde said energy-driven inflation has yet to spread across the wider euro area, supporting a wait-and-see approach. However, persistent price pressures and the ongoing US-Iran conflict have strengthened expectations of another ECB rate hike in December, following two increases earlier this year. French borrowing costs remain near their highest levels in over two decades, as record public debt and political hurdles complicate fiscal consolidation.
The government aims to cut the budget deficit to 5% of GDP by 2027, but parliamentary support for significant spending cuts remains uncertain ahead of next year’s presidential election.