French Borrowing Costs Rise Above US Treasury Yields for First Time Since 2013
On 22 October 2026, the cost of French government borrowing over ten years moved above the equivalent US Treasury yield for the first time since 2013, The Guardian reported. The cost of borrowing is measured as a yield, the annual return investors demand for lending money to a government. When investors sell a government's bonds, the yield rises, and the government pays more to borrow.
In early trading on 22 October, the yield on France's 10-year government bond, known as the OAT, rose nine basis points (hundredths of a percentage point) to 5.089%. That was its highest level since July 2022. A day earlier, on 21 October, the yield had moved above 5% for the first time since 2002. The gap between French and German 10-year yields, known as the spread, reached its highest level in almost 15 years on 22 October. Reuters put that spread at 150 basis points on 21 October.
The pressure reflects France's public finances. The budget deficit, the gap between government spending and revenue, was 5.1% of gross domestic product (GDP, the total value of a country's annual output) in 2025. Public debt stood at 115.6% of GDP that year, according to the same report. In 2026, French 10-year bonds were the worst performers of any Group of 10 economy, a set of major advanced economies, Bloomberg reported.
Politics has added to the strain. In October, a deadlock in parliament blocked President Emmanuel Macron's plan to raise the state pension age, the age at which people can begin drawing a state pension, from 62 to 64. In the days before 22 October, protesters demanding more teachers and repairs to school buildings marched across France, and clashes with police were reported in Paris, Bordeaux, Nice and Marseille. France's interior ministry said nearly 2,400 arrests had been made amid the unrest.
Bloomberg reported that French government bonds fell after a weekend of violent unrest in October, and that protesters were upset over the cost of living. Separately, the European Central Bank, which sets interest rates for the euro zone, raised its key rate to 2.5% in September 2026.
Movements in French bonds also reach currency markets. Bank of America's foreign exchange strategists estimated that each further 10-basis-point widening of the French spread against Germany would be associated with a 0.4% fall in the euro against the US dollar, Reuters reported.
