Key information about EU Short Term Government Bond Yield

• European Union Short Term Government Bond Yield: Month Avg: Euro Area: 2 Years was reported at 2.23 % pa in Feb 2025, compared with 2.38 % pa in the previous month.
• EU Short Term Government Bond Yield data is updated monthly, available from Jan 1970 to Feb 2025.
• The data reached an all-time high of 13.56 % pa in Feb 2012 and a record low of -0.65 % pa in Nov 2021.
• Short Term Government Bond Yield is reported by CEIC Data.

This dataset provides values for 2 YEAR NOTE YIELD reported in several countries. The data includes current values, previous releases, historical highs and record lows, release frequency, reported unit and currency.

As of December 30, 2024, ** economies reported a negative value for their ten year minus two year government bond yield spread: Ukraine with a negative spread of ***** percent; Turkey, with a negative spread of 1332 percent; Nigeria with **** percent; and Russia with **** percent. At this time, almost all long-term debt for major economies was generating positive yields, with only the most stable European countries seeing smaller values. Why is an inverted yield curve important? Often called an inverted yield curve or negative yield curve, a situation where short term debt has a higher yield than long term debt is considered a main indicator of an impending recession. Essentially, this situation reflects an underlying belief among a majority of investors that short term interest rates are about to fall, with the lowering of interest rates being the orthodox fiscal response to a recession. Therefore, investors purchase safe government debt at today's higher interest rate, driving down the yield on long term debt. In the United States, an inverted yield curve for an extended period preceded (almost) all recent recessions. The exception to this is the economic downturn caused by the coronavirus (COVID-19) pandemic – however, the U.S. ten minus two year spread still came very close to negative territory in mid-2019. Bond yields and the coronavirus pandemic The onset of the coronavirus saw stock markets around the world crash in March 2020. This had an effect on bond markets, with the yield of both long term government debt and short term government debt falling dramatically at this time – reaching negative territory in many countries. With stock values collapsing, many investors placed their money in government debt – which guarantees both a regular interest payment and stable underlying value - in contrast to falling share prices. This led to many investors paying an amount for bonds on the market that was higher than the overall return for the duration of the bond (which is what is signified by a negative yield). However, the calculus is that the small loss taken on stable bonds is less that the losses likely to occur on the market. Moreover, if conditions continue to deteriorate, the bonds may be sold on at an even higher price, partly offsetting the losses from the negative yield.

Graph and download economic data for Interest Rates: Long-Term Government Bond Yields: 10-Year: Main (Including Benchmark) for Euro Area (19 Countries) (IRLTLT01EZM156N) from Jan 1970 to Jun 2025 about long-term, Euro Area, 10-year, Europe, bonds, yield, government, interest rate, interest, and rate.

As of July 18, 2025, the major economy with the highest yield on 10-year government bonds was Turkey, with a yield of ** percent. This is due to the risks investors take when investing in Turkey, notably due to high inflation rates potentially eradicating any profits made when using a foreign currency to investing in securities denominated in Turkish lira. Of the major developed economies, United Kingdom had one the highest yield on 10-year government bonds at this time with **** percent, while Switzerland had the lowest at **** percent. How does inflation influence the yields of government bonds? Inflation reduces purchasing power over time. Due to this, investors seek higher returns to offset the anticipated decrease in purchasing power resulting from rapid price rises. In countries with high inflation, government bond yields often incorporate investor expectations and risk premiums, resulting in comparatively higher rates offered by these bonds. Why are government bond rates significant? Government bond rates are an important indicator of financial markets, serving as a benchmark for borrowing costs, interest rates, and investor sentiment. They affect the cost of government borrowing, influence the price of various financial instruments, and serve as a reflection of expectations regarding inflation and economic growth. For instance, in financial analysis and investing, people often use the 10-year U.S. government bond rates as a proxy for the longer-term risk-free rate.

This dataset provides values for INTEREST RATE reported in several countries. The data includes current values, previous releases, historical highs and record lows, release frequency, reported unit and currency.

As of July 22, 2025, the yield for a ten-year U.S. government bond was 4.38 percent, while the yield for a two-year bond was 3.88 percent. This represents an inverted yield curve, whereby bonds of longer maturities provide a lower yield, reflecting investors' expectations for a decline in long-term interest rates. Hence, making long-term debt holders open to more risk under the uncertainty around the condition of financial markets in the future. That markets are uncertain can be seen by considering both the short-term fluctuations, and the long-term downward trend, of the yields of U.S. government bonds from 2006 to 2021, before the treasury yield curve increased again significantly in the following years. What are government bonds? Government bonds, otherwise called ‘sovereign’ or ‘treasury’ bonds, are financial instruments used by governments to raise money for government spending. Investors give the government a certain amount of money (the ‘face value’), to be repaid at a specified time in the future (the ‘maturity date’). In addition, the government makes regular periodic interest payments (called ‘coupon payments’). Once initially issued, government bonds are tradable on financial markets, meaning their value can fluctuate over time (even though the underlying face value and coupon payments remain the same). Investors are attracted to government bonds as, provided the country in question has a stable economy and political system, they are a very safe investment. Accordingly, in periods of economic turmoil, investors may be willing to accept a negative overall return in order to have a safe haven for their money. For example, once the market value is compared to the total received from remaining interest payments and the face value, investors have been willing to accept a negative return on two-year German government bonds between 2014 and 2021. Conversely, if the underlying economy and political structures are weak, investors demand a higher return to compensate for the higher risk they take on. Consequently, the return on bonds in emerging markets like Brazil are consistently higher than that of the United States (and other developed economies). Inverted yield curves When investors are worried about the financial future, it can lead to what is called an ‘inverted yield curve’. An inverted yield curve is where investors pay more for short term bonds than long term, indicating they do not have confidence in long-term financial conditions. Historically, the yield curve has historically inverted before each of the last five U.S. recessions. The last U.S. yield curve inversion occurred at several brief points in 2019 – a trend which continued until the Federal Reserve cut interest rates several times over that year. However, the ultimate trigger for the next recession was the unpredicted, exogenous shock of the global coronavirus (COVID-19) pandemic, showing how such informal indicators may be grounded just as much in coincidence as causation.

From 2003 to 2025, the central banks of the United States, United Kingdom, and European Union exhibited remarkably similar interest rate patterns, reflecting shared global economic conditions. In the early 2000s, rates were initially low to stimulate growth, then increased as economies showed signs of overheating prior to 2008. The financial crisis that year prompted sharp rate cuts to near-zero levels, which persisted for an extended period to support economic recovery. The COVID-19 pandemic in 2020 led to further rate reductions to historic lows, aiming to mitigate economic fallout. However, surging inflation in 2022 triggered a dramatic policy shift, with the Federal Reserve, Bank of England, and European Central Bank significantly raising rates to curb price pressures. As inflation stabilized in late 2023 and early 2024, the ECB and Bank of England initiated rate cuts by mid-2024, and the Federal Reserve also implemented its first cut in three years, with forecasts suggesting a gradual decrease in all major interest rates between 2025 and 2026. Divergent approaches within the European Union While the ECB sets a benchmark rate for the Eurozone, individual EU countries have adopted diverse strategies to address their unique economic circumstances. For instance, Hungary set the highest rate in the EU at 13 percent in September 2023, gradually reducing it to 6.5 percent by October 2024. In contrast, Sweden implemented more aggressive cuts, lowering its rate to 2.25 percent by February 2025, the lowest among EU members. These variations highlight the complex economic landscape that European central banks must navigate, balancing inflation control with economic growth support. Global context and future outlook The interest rate changes in major economies have had far-reaching effects on global financial markets. Government bond yields, for example, reflect these policy shifts and investor sentiment. As of December 2024, the United States had the highest 10-year government bond yield among developed economies at 4.59 percent, while Switzerland had the lowest at 0.27 percent. These rates serve as important benchmarks for borrowing costs and economic expectations worldwide.

All data are expressed as a percentage, except for GDP per capita, net wages, total population, life expectancy, expected years of education, average years of schooling, life and non-life premium, total premium, bank deposits, financial assets and deposits of insurance companies, which are expressed in absolute terms.

Source of data:

1. Data on Life and Non-life premium, Total (gross) premium, Premium reserve data, Financial assets and Deposits of insurance companies are collected from the official reports of insurance supervision agencies: Insurance Supervision Agency in Montenegro (http://www.ano.me/en/), Croatian Financial Services Supervisory Agency (https://www.hanfa.hr/en/), National Bank of Serbia (https://www.nbs.rs/internet/english/, Insurance Supervision Agency of North Macedonia (http://aso.mk/en/?lang=en) and Financial Supervisory Authority in Albania (https://amf.gov.al/).
2. The economic indicators for the observed Western Balkan countries (GDP per capita, unemployment rate, inflation rate, net earnings and average effective deposit interest rate) are taken from the website Eurostat (https://ec.europa.eu/eurostat) and Statista (https://www.statista.com/)
3. All demographic indicators, except for the expected and average years of schooling and education index, were collected from the Eurostat and UNDP database (https://ec.europa.eu/eurostat/data/database; http://hdr.undp.org/en/countries/profiles/ ).
4. Data on expected and average school years were taken from the UNESCO Institute for Statistics (http://uis.unesco.org) , while the education index was obtained as a result of a calculation based on a formula published on the UNDP website (http://hdr.undp.org/en/content/education-index).
5. Data on bond yield were collected from the website of European Commission (https://ec.europa.eu/), i.e. from EC reports - EU Candidate Countries’ & Potential Candidates’ Economic Quarterly (CCEQ), except two data for Serbia (2006 and 2007) which were estimated by Makima extrapolation.
6. Bank deposits data are taken from the official reports of banks' regulatory institutions: Central bank of Montenegro (https://www.cbcg.me/en), National bank of Serbia (https://www.nbs.rs/en/indeks/), Croatian National bank (https://www.hnb.hr/en/home), National bank of the Republic of North Macedonia (https://www.nbrm.mk/pocetna-en.nspx); Bank of Albania (https://www.bankofalbania.org/home/)

Description of columns:

f1-GDPper capita; f2- Unemployment (%); f3-Inflation rate (%); f4- Net Wages €; f5- Deposit rate (%); f6- Population; f7- Female (%); f8- Population <15 (%); f9- Population 15-64 (%); f10- Dep old (%); f11- Dep young (%); f12- Urban population (%); f13-Life exp. (years); f14- Preschool enroll rate (%); f15- Elem school enroll rate (%); f16-High school enroll rate (%); f17- University enroll rate (%); f18- Expected years of schooling; f19- Avg. years of schooling; f20- Education Index (%); f21- Fertility rate (number of children to a woman); f22- Birth rate (per 1000 inhabitants); f23- Health costs (% GDP); f24-premium reserve per GDP,

i1- life premium €; i2- non-life premium €; i3- total premium €; i4- bond yield (%); i5a- bank deposits ( national currency); i5b- bank deposits €; i6a-financial assets in insurance (national currency); i6b- financial assets in insurance €; i7a- deposits of insurers (national currency); i7b –deposit of insurers €

The benchmark interest rate In the Euro Area was last recorded at 2.15 percent. This dataset provides - Euro Area Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

The European Exchange-Traded Funds (ETF) industry is experiencing robust growth, projected to maintain a Compound Annual Growth Rate (CAGR) exceeding 8% from 2025 to 2033. This expansion is driven by several key factors. Increasing investor sophistication and a preference for diversified, low-cost investment vehicles are fueling demand for ETFs across asset classes. Regulatory changes promoting transparency and accessibility within European financial markets further contribute to this growth trajectory. The rising popularity of passive investment strategies, coupled with the convenience and liquidity offered by ETFs, continues to attract both institutional and retail investors. Specific growth segments include Equity ETFs, driven by strong performance in European stock markets and increasing interest in thematic and sector-specific investments. Fixed Income ETFs also demonstrate significant potential, particularly given the current low-interest-rate environment and investors' search for yield. While potential economic slowdowns or market volatility could act as restraints, the overall long-term outlook remains positive, supported by the continued maturation of the ETF market and its integration into European investment strategies. The leading players in the European ETF market, including iShares (BlackRock), Xtrackers, Vanguard, and Invesco, are actively competing through product innovation and cost optimization. Competition is driving innovation, leading to the introduction of specialized ETFs targeting niche market segments, such as sustainable investing or specific geographic regions. The geographical distribution of the market reflects the economic strengths of various European nations. The United Kingdom, Germany, and France are expected to remain dominant markets due to their established financial infrastructure and investor base, while growth in other European countries like the Netherlands, Spain, and Poland is also anticipated to contribute significantly to the overall expansion of the European ETF market. The continued expansion of the ETF market will depend upon various factors, including regulatory developments, economic conditions and sustained investor appetite for passive investment strategies. The forecast indicates a substantial increase in market size over the coming years reflecting the positive outlook for this industry. Recent developments include: February 2023: Vontobel launches two emerging market bond funds in response to increased investor interest. One of the two funds (Vontobel Fund - Emerging Markets Investment Grade) aims to provide clients with access to fixed income through a lower-risk version of Vontobel's existing hard currency funds. The other fund (Vontobel Fund - Asian Bond) is Asia-focused and primarily invests in corporate bonds across the region with different maturities in various hard currencies., February 2023: Mapfre Asset Management, owned by Spain's largest insurer Mapfre Group, increased its stake in a French mutual fund company to boost ESG capabilities and fund distribution in France. The Spanish firm acquired a further 26% equity stake in La Financière Responsable (LFR), which includes USD 706 million of assets under management (AUM), taking its total holding to 51%.. Notable trends are: Equity Funds occupied the Major percentage in ETF Market.

Abstract (en): In this article, the author analyzes the future prospects of the euro as an international currency from a portfolio perspective. Using daily bond and exchange-rate data during the period 1996-1998, the author constructs an optimal benchmark portfolio for representative investors from the United States, Japan, the United Kingdom, and the three major European countries participating in the euro: France, Germany, and Italy. Subsequently, the author distinguishes three plausible (euro) exchange-rate scenarios and three plausible (European) bond market scenarios as a result of the introduction of the euro. Then, the portfolio optimization is implemented again under the nine scenarios. Generally, the outcomes suggest that an increase in net demand for euro assets is unlikely, due to the inherent reduction of attractive diversification possibilities. For a given eurobond supply, this in turn implies a depreciation of the euro. Potential entry of the United Kingdom into the euro area is not seen to change the results. However, increasing depth and liquidity of European bond markets, together with lower transaction costs, may reverse the conclusions. Finally, the author shows that both actual supply and demand developments in international bond markets in 1999 are consistent with the observed depreciation of the euro relative to the United States dollar. (1) Two files were submitted: 0009ck.xls, a data file, and 0009ckp.zip, which contains program files and a description file, 0009ckp.doc. (2) These data are part of ICPSR's Publication-Related Archive and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator if further information is desired.