BlackRock: Over 80% of Global Bond Yields Exceed 4%
BlackRock's latest weekly report from its investment research institute shows that over 80% of the selected global bond universe now has yields exceeding 4%, compared to only 6.3% five years ago.
This data is based on LSEG Datastream statistics as of September 30, 2026, covering approximately 70% of the Bloomberg Multiverse Bond Index, which includes categories such as U.S. Treasuries, core and peripheral Eurozone bonds, emerging market local and foreign currency bonds, and corporate bonds. Five years ago, in a low-interest-rate environment, the vast majority of bond yields were suppressed below 4%, but they have now fully rebounded.
Driving factors include a structural rate reset in the post-pandemic era, ongoing inflationary pressures, accelerated capital expenditures related to artificial intelligence, and increased government borrowing leading to intensified capital competition. Long-term government bonds have been hit hardest, with term premiums rising and investors demanding higher compensation.
The sell-off of French government bonds has become a typical case, with its 10-year yield rising by about 100 basis points to nearly 5% since early August, widening the spread against German bonds, reflecting fiscal and political risk premiums. The overall debt ratio in the Eurozone is about 89%, while France has risen to 119%.
As a result, BlackRock emphasizes selectivity, upgrading U.S. Treasuries (favoring short to medium-term), reducing underweighting of Japanese government bonds (with long-term yields exceeding 3%), favoring emerging market local currency bonds, especially in Latin America, and adopting a barbell strategy in corporate bonds, preferring higher-rated high-yield bonds while avoiding pressures from AI-related investment-grade issuances and weak credit refinancing risks.
In market mechanics, buyers are institutions and individual investors seeking yields, while sellers include government and corporate issuers; this is an event driven by rate resets and capital competition, with funds flowing from ultra-long bonds to short to medium-term Treasuries, selected credit bonds, and emerging market bonds. Beneficiaries are issuers and investors whose yields have adequately compensated for risks, while those under pressure are borrowers with deteriorating fundamentals and unsustainable finances.
Source: Public Information
ABAB AI Insight
BlackRock's investment research institute has consistently emphasized the end of the low-interest-rate era following the financial crisis, entering a new macro regime of "higher for longer." The institution has repeatedly pointed out in various weekly reports and outlooks that post-pandemic policy rate hikes, normalization of term premiums, and the combined effects of AI capital expenditures and government deficits have jointly pushed up financing costs, turning this judgment from prediction into reality.
The capital path reflects a shift of funds from "there is no alternative" (TINA) stocks and high-risk assets to fixed income, which has regained attractiveness. Investors are no longer forced to extend duration or downgrade credit quality to obtain yields, but are making selective allocations at higher starting yield levels; at the same time, increased capital demand from government and AI-related investments intensifies competition for limited funds.
This is similar to the higher interest rate environments before 2008 or during the Volcker era, and it approaches the end of the "no alternatives" era. We are currently in a transitional phase where fixed income shifts from yield scarcity to yield abundance but with risk differentiation, akin to the early telemedicine path of platforming services, except here it is a reconstruction of yield sources.
Essentially, this involves a transfer of pricing power and intensified capital competition. The mechanism is the overlay of actual resource constraints (energy, labor, geopolitics) and fiscal expansion, leading to a structural rise in long-term capital costs; investors are both able and willing to distinguish between "higher yields that compensate for risks" and "warning signals of deteriorating fundamentals," thereby shifting the selection power from passive holding to active choice.
ABAB News · Law of Cognition
When yields are abundant, selection is more important than holding.
Rate resets are turning bonds back into leading roles.
The more intense the capital competition, the more valuable the fundamentals.