US Debt Sell-Off Speeds Up, Pulling European Government Bonds Lower
Dow Jones reports Treasury yields climbed further as Fed officials leaned toward more hikes, while European and UK bonds followed and oil rose on Iran comments.
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what happened
Dow Jones Newswires reports that the sell-off in US Treasuries picked up pace on Thursday, as Federal Reserve officials discussed bringing inflation down through higher borrowing costs. Existing home sales fell to their weakest level since 2010 as mortgage rates moved above 7%. The two-year note yield finished at 4.862%, its biggest two-day rise since March 2023, while the 10-year yield closed at 5.102%, its largest two-day increase since April 2025.
President Trump said the US does not need a deal with Iran, dashing hopes for a peace agreement. Oil prices rose, which strengthened expectations for further Fed rate hikes. According to LSEG, markets price a 25-basis-point hike in December at 85% odds and a 50-basis-point move at 15%. Cleveland Fed President Beth Hammack prefers smaller, steadier policy steps, while San Francisco Fed President Mary Daly said: "My bias is that further tightening will be needed because you just see this consistent pressure on inflation."
In Europe and the UK, government bond yields reversed earlier declines and moved higher. The German 10-year Bund closed at 3.358%, and the UK 10-year Gilt at 5.302%. UK GDP grew 0.7% in the third quarter from the previous quarter, the strongest expansion since the first quarter of 2024, though this matched the Wall Street Journal survey consensus. LSEG data show a 74% probability of a 25-basis-point Bank of England hike in December.
why it matters
For markets, the combination of rising yields and firmer rate expectations makes borrowing more expensive across the curve. Macquarie strategist Thierry Wizman said a possible US government shutdown, lower oil prices from a potential Iran deal, or a deeper stock selloff tied to AI could all influence the Fed's December 9 decision.
market impact
Bonds: higher yields weigh on US, German and UK government debt; oil gains on Iran deal doubts
- US Treasuries pressure down — yields rose as expectations for tighter Fed policy firmed
- Brent pressure up — Trump's rejection of an Iran deal adds a supply-risk premium
- UK Gilts pressure down — yields climbed after strong GDP and Bank of England hike pricing
tags
instruments
sources
- Treasury Selloff Accelerates, European Bonds Follow Suit — 3rd Update — Dow Jones Newswires, 12 November 2026 at 20:40 UTC
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