The term premium — the extra compensation investors demand to hold longer maturity Treasuries — has climbed to its highest in more than a decade, driving the latest stage of the selloff. The benchmark 10-year yield reached 5.34% Thursday, with borrowing costs across the US, France, Britain and Japan at multidecade highs.
Competition for capital is also contributing to higher yields. Pimco President Christian Stracke identified demand from large cloud companies and the AI ecosystem, rather than inflation expectations, as the primary force pushing real rates and bond yields higher. Amazon, Alphabet, Meta and Oracle sold about $194 billion of bonds by early July, 79% more than in all of 2025.