French 10-year bond yields breach 5% as spread with Germany widens sharply

France's benchmark 10-year government bond yield exceeded 5%, a milestone last reached in the early 2000s, underscoring the strain on the country's fiscal outlook. While worldwide interest rates stay high, the differential between French and German 10-year yields—known as the spread—jumped to 157 basis points, a level previously seen only during the eurozone crisis of 2011 and before the adoption of the euro. The spread had hovered around 50 basis points in mid-2024, rose to about 80 after the dissolution of the National Assembly, and only recently accelerated beyond 100 basis points. This rapid widening highlights the market's view that France's budgetary and political turmoil are self-inflicted rather than driven by external shocks.