To See Long Bond Volatility Clearly, Look Globally

Everyone is talking about bond yields! And everyone is missing the obvious. There is a very easy way to cut through the cacophony of debt fears. Come along and see.

Whenever long-term bond yields jump somewhat, as they have lately, we see a common error: narrow focus on individual issuers that fuels country-specific narratives. We see a lot of coverage linking higher US 30-year yields to concerns of budget turmoil if Uncle Sam has to pay back tariff revenue in a hurry after an appellate court upheld the Court of International Trade’s ruling the universal and reciprocal tariffs were illegal—as if US yields alone are spiking. Yet across the pond, UK 30-year yields are also up, and headlines are linking it to a cabinet reshuffle that allegedly implies austerity won’t feature heavily in October’s Budget. This, similarly, treats rising yields as a UK-specific phenomenon. Coverage of French yields’ spike does the same, continuing to take the finance minister’s comments about a potential IMF bailout out of context, spinning them into a debt crisis freakout.^[i] And higher German yields, we are told, result from expectations for higher public spending.

Four countries, four yield “spikes,” four allegedly domestic explanations.

May we offer a different one? Bond markets are global. Developed-world yields are highly correlated. Yields are up in these nations because yields are up globally. Italy is newly the posterchild for European fiscal sanity, yet its 30-year yield is up almost 30 basis points over the past month. Spain’s is up, too, despite relative calm on the deficit front. And Canada’s. And Australia’s. See for yourself. Exhibit 1 shows several nations’ cumulative rise in 30-year yields since August 22, otherwise known as a week ago Friday.

Exhibit 1: Around the World in 30-Year Yields

Source: FactSet, as of 9/2/2025. Cumulative change in 30-year benchmark government bond yields, 8/22/2025 – 9/2/2025.

Moves like this get a lot of attention because the investing world thinks of bonds as staid, boring and stable. And in a sense they are, with overall less expected short-term volatility than stocks. But less volatility isn’t no volatility. Bond markets do wiggle, up and down, as sentiment ebbs and flows. This looks to us like a classic sentiment wiggle in a year that has seen modest yield increases across the board. Exhibit 1 contrasts the recent and year-to-date moves in 30-year yields. Amusingly, this year’s biggest mover among these is actually the Netherlands, where debt is below 50% of GDP and deficit concerns are nonexistent. There is plenty of talk about Dutch pension reform weighing on demand for long-term yields, but that seems like a marginal, Europe-wide driver, not a Dutch-specific one, given the Netherlands’ small pool of marketable debt.

Exhibit 2: 30-Year Yield Volatility in Perspective

Source: FactSet, as of 9/2/2025. Cumulative change in 30-year benchmark government bond yields, 12/31/2024 – 9/2/2025 and 8/22/2025 – 9/2/2025.

Deficit concerns are an easy target. We get it. But they have been omnipresent in the US, UK, France and many others for years. And years. And years. Through high yields and low. They are a pulsating constant. Tying acute volatility to any of this seems like searching for meaning in bouncy times, a classic error. Sometimes volatility is just volatility.

May we offer you an alternate perspective? With long yields up somewhat this year and central banks cutting rates, yield curves have steepened—especially outside the US. This is a pretty solid economic indicator, one pointing to faster growth ahead. But instead of cheering, bond market watchers are jeering. This is the kind of false fear bull markets thrive on—a beautiful brick in the wall of worry.