French Bond Yields Hit 24-Year High Amid Political Unrest

French government bonds have reached a 24-year high, with 10-year yields hitting 5.14%. Spreads over German Bunds have widened to their highest levels since 2011, driven by political fragmentation, a pending budget vote, and renewed civil unrest. The Yellow Vests are planning a major march in Paris on October 24, further fueling market volatility.

The French Republic is facing a sovereign debt crisis as it struggles to pass a national budget. This instability has coincided with broader financial concerns, as credit default swaps for AI giants Meta and Nvidia hit record highs. The International Monetary Fund warned that unsustainable AI infrastructure spending and rising sovereign yields could act as systemic triggers for global financial instability.

In the United States, Treasury yields have reached multi-decade highs, though they currently serve as a safe-haven asset. Meanwhile, Elon Musk has reportedly invested $1 billion in Skydance, a company managing significant debt following its acquisition of Warner Bros. Discovery.