2025.09.1909:33:10UTC+00France 10-Year Bond Yield Climbs to 2-Week High

France's 10-year government bond yield has climbed to 3.55%, marking a peak not seen since early September, following a tumultuous week driven by the nation's budget challenges and decisions by central banks worldwide. Prime Minister Sébastien Lecornu is currently working to secure parliamentary approval for the 2026 budget amid rising political opposition and broad public disapproval of the proposed cuts in government spending. The yield differential between France and German Bunds has widened, increasing the pressure on the newly appointed Prime Minister. Earlier in the week, France's long-term credit rating was downgraded, and there was a brief inversion where its sovereign yields fell below Italy's—an atypical scenario. On the monetary policy front, the Federal Reserve reduced interest rates after a nine-month hiatus, while the Bank of Japan maintained its current policy stance but indicated a potential rate hike could occur later this year. Meanwhile, the Bank of England left interest rates unchanged.