U.S. Treasuries are on track for their best week since February amid concerns about AI

U.S. Treasury bonds are poised to post their best weekly performance since February, as concerns about artificial intelligence and easing expectations regarding interest rate hikes have put a brake on the months-long global bond sell-off, according to the Financial Times.

The yield on 10-year U.S. Treasury bonds—the benchmark for global debt markets—fell by 0.16 percentage points this week to 5.09% as bond prices rose. This trend marks a sharp reversal following months of selling in the bond market, which was triggered by the war with Iran and fueled by the resilience of the U.S. economy, the FT reports. Last week, the yield on 10-year Treasuries exceeded 5.3% and reached its highest level since 2002, whereas at the end of February, that figure was below 4%.

However, this week, U.S. Treasury bonds partially recovered from their decline amid demand for safe-haven assets: concerns about the sustainability of the AI boom triggered a sell-off of shares in technology and AI-related companies around the world.

This turnaround also brought some relief to the economies of European countries, where the cost of long-term borrowing had risen to multi-decade highs following the recent sell-off. For example, the yield on 10-year British government bonds fell this week by 0.08 percentage points to 5.37%, while the yield on comparable French bonds fell by 0.05 percentage points to 4.8%.

This article was AI-translated and verified by a human editor