Market history · Bonds ·
Long yields climb to 2007 highs as gold rallies
Through August 2026, government bond yields rose across the major markets. The US 30-year Treasury yield briefly reached its highest level since 2007 after Fed Chair Kevin Warsh gave a hawkish speech at Jackson Hole and acknowledged that recent inflation data had not meaningfully improved. In Europe the 10-year German Bund yield reached a cycle high of 3.32%, and Japan's 10-year yield reached 2.95%, a multi-decade high.
The US Treasury also said it would at least double the pace of its longer-dated buybacks from September. Gold rose by roughly a tenth in the month and the dollar weakened, as some investors returned to the so-called debasement trade, the idea of owning real assets against the risk that governments finance large deficits by tolerating inflation. Equities, meanwhile, kept rising: the S&P 500 gained 2.7% in August, helped by a strong Nvidia earnings report.
It was an unusual mix: stocks, gold and yields all rising together, while the dollar slipped. Markets were pricing rate rises from the Fed, the European Central Bank and the Bank of Japan.
The takeaway
When yields rise because of inflation and borrowing worries rather than strong growth, long-dated bonds can lose money even as shares do well.
This is a retrospective about a past event, provided for general information. It is not investment advice, does not describe RockLake's positioning at the time, and past performance is not a guide to future performance. Read the risk warning.