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.

Inflation-Linked Project Bonds Market Outlook

As per our latest research, the global inflation-linked project bonds market size reached USD 82.4 billion in 2024, reflecting the increasing appetite for inflation-hedged investment instruments amid macroeconomic volatility. The market is expanding at a robust CAGR of 7.1% and is forecasted to achieve a value of USD 153.7 billion by 2033. This growth trajectory is primarily fueled by heightened infrastructure spending, growing concerns over inflationary pressures, and the rising demand for resilient financing mechanisms in both developed and emerging economies. The evolution of inflation-linked project bonds is significantly transforming project financing, providing both issuers and investors with innovative tools to mitigate inflation risks while supporting crucial infrastructure development.

One of the primary growth drivers for the inflation-linked project bonds market is the persistent global inflationary environment, which has prompted both public and private sector entities to seek financing mechanisms that offer protection against the erosion of real returns. Governments and institutional investors are increasingly favoring inflation-linked project bonds as a strategic hedge, particularly in long-term infrastructure projects where cost overruns due to inflation can severely impact financial viability. The ability of these bonds to adjust principal and interest payments in line with inflation indices such as the Consumer Price Index (CPI) makes them an attractive option for projects with extended timelines, such as energy, transportation, and water management. This inflation-hedging feature not only ensures the sustainability of project cash flows but also enhances investor confidence, driving the consistent expansion of the market.

Another significant factor propelling the market is the surge in global infrastructure investment, especially in emerging markets where rapid urbanization and population growth are necessitating massive upgrades in transportation, energy, and social infrastructure. Inflation-linked project bonds are increasingly being utilized to finance these capital-intensive projects, as they provide a stable and predictable return structure for investors, even in volatile economic conditions. The availability of inflation-linked instruments has also enabled governments to attract a broader array of investors, including pension funds and insurance companies, who are seeking long-term, inflation-protected assets. This influx of capital is crucial for bridging the infrastructure financing gap, particularly in regions where traditional funding sources are constrained by fiscal limitations or credit risk concerns.

Technological advancements and financial innovation are further catalyzing the adoption of inflation-linked project bonds. The integration of sophisticated risk management tools, transparent pricing mechanisms, and digital issuance platforms has streamlined the structuring and distribution of these bonds, making them more accessible to a diverse investor base. Additionally, the growing involvement of multilateral agencies and development banks in structuring and guaranteeing inflation-linked bonds has enhanced their credibility and reduced perceived risks, especially in frontier markets. These developments are not only broadening the marketÂ’s geographical reach but also fostering a more competitive and dynamic landscape, encouraging further innovation and expansion.

In the realm of inflation-hedged investment instruments, Treasury Inflation-Protected Securities (TIPS) have emerged as a vital component for investors seeking to safeguard their portfolios against inflationary pressures. TIPS are government-issued bonds that adjust their principal value in line with inflation, as measured by the Consumer Price Index (CPI). This unique feature ensures that the real value of the investment is preserved, offering a reliable hedge against the erosion of purchasing power. The growing interest in TIPS is reflective of the broader trend towards inflation-linked securities, as investors increasingly prioritize stability and predictability in their investment strategies. The integration of TIPS into diversified portfolios is not only enhancing resilience but also aligning with the evolving demands of institutional investors who are navigating complex economic landscapes.

Iceland Breakeven Inflation Rate: Bond Market: 5 Year data was reported at 3.300 % in Dec 2024. This records a decrease from the previous number of 3.800 % for Sep 2024. Iceland Breakeven Inflation Rate: Bond Market: 5 Year data is updated quarterly, averaging 3.360 % from Mar 2003 (Median) to Dec 2024, with 88 observations. The data reached an all-time high of 7.531 % in Dec 2008 and a record low of 1.900 % in Jun 2020. Iceland Breakeven Inflation Rate: Bond Market: 5 Year data remains active status in CEIC and is reported by Central Bank of Iceland. The data is categorized under Global Database’s Iceland – Table IS.I018: Breakeven Inflation Rate (BEI). [COVID-19-IMPACT]

At the end of 2024, the yield on the 10-year U.S. Treasury bond was **** percent. Despite the increase in recent years, the highest yields could be observed in the early 1990s. What affects bond prices? The factors that play a big role in valuation and interest in government bonds are interest rate and inflation. If inflation is expected to be high, investors will demand a higher return on bonds. Country credit ratings indicate how stable the economy is and thus also influence the government bond prices. Risk and bonds Finally, when investors are worried about the bond issuer’s ability to pay at the end of the term, they demand a higher interest rate. For the U.S. Treasury, the vast majority of investors consider the investment to be perfectly safe. Ten-year government bonds from other countries show that countries seen as more risky have a higher bond return. On the other hand, countries in which investors do not expect economic growth have a lower yield.

Iceland Breakeven Inflation Rate: Bond Market: 10 Year data was reported at 3.800 % in Dec 2024. This records a decrease from the previous number of 4.000 % for Sep 2024. Iceland Breakeven Inflation Rate: Bond Market: 10 Year data is updated quarterly, averaging 3.444 % from Mar 2003 (Median) to Dec 2024, with 88 observations. The data reached an all-time high of 5.892 % in Dec 2008 and a record low of 1.349 % in Dec 2006. Iceland Breakeven Inflation Rate: Bond Market: 10 Year data remains active status in CEIC and is reported by Central Bank of Iceland. The data is categorized under Global Database’s Iceland – Table IS.I018: Breakeven Inflation Rate (BEI). [COVID-19-IMPACT]

We study how the co-movement of inflation and economic activity affects real interest rates and the likelihood of debt crises. First, we show that for advanced economies, periods with procyclical inflation are associated with lower real interest rates. Procyclical inflation implies that nominal bonds pay out more in bad times, making them a good hedge against aggregate risk. However, such procyclicality also increases sovereign default risk when the economy deteriorates, since the government needs to make larger (real) payments. In order to evaluate both effects, we develop a model of sovereign default on domestic nominal debt with exogenous inflation risk and domestic risk-averse lenders. Countercyclical inflation is a substitute with default, while procyclical inflation is a complement with it, by increasing default incentives. In good times, when default is unlikely, procyclical inflation yields lower real rates. In bad times, as default becomes more material, procyclical inflation can magnify default risk and trigger an increase in real rates.

Ten-Year TIPS Yields versus Real Yields is a part of the Inflation Expectations indicator of the Federal Reserve Bank of Cleveland.

Graph and download economic data for 5-Year Breakeven Inflation Rate (T5YIE) from 2003-01-02 to 2025-11-28 about spread, 5-year, interest rate, interest, inflation, rate, and USA.

The Federal Reserve's balance sheet has undergone significant changes since 2007, reflecting its response to major economic crises. From a modest *** trillion U.S. dollars at the end of 2007, it ballooned to approximately **** trillion U.S. dollars by October 29, 2025. This dramatic expansion, particularly during the 2008 financial crisis and the COVID-19 pandemic—both of which resulted in negative annual GDP growth in the U.S.—showcases the Fed's crucial role in stabilizing the economy through expansionary monetary policies. Impact on inflation and interest rates The Fed's expansionary measures, while aimed at stimulating economic growth, have had notable effects on inflation and interest rates. Following the quantitative easing in 2020, inflation in the United States reached ***** percent in 2022, the highest since 1991. However, by August 2025, inflation had declined to *** percent. Concurrently, the Federal Reserve implemented a series of interest rate hikes, with the rate peaking at **** percent in August 2023, before the first rate cut since September 2021 occurred in September 2024. Financial implications for the Federal Reserve The expansion of the Fed's balance sheet and subsequent interest rate hikes have had significant financial implications. In 2024, the Fed reported a negative net income of ***** billion U.S. dollars, a stark contrast to the ***** billion U.S. dollars profit in 2022. This unprecedented shift was primarily due to rapidly rising interest rates, which caused the Fed's interest expenses to soar to over *** billion U.S. dollars in 2023. Despite this, the Fed's net interest income on securities acquired through open market operations reached a record high of ****** billion U.S. dollars in the same year.

Russia Domestic Government Bonds: Inflation Linked: 52002RMFS: Days to Maturity data was reported at 2,751.000 NA in 22 Jul 2020. This records a decrease from the previous number of 2,786.000 NA for 17 Jun 2020. Russia Domestic Government Bonds: Inflation Linked: 52002RMFS: Days to Maturity data is updated weekly, averaging 3,136.000 NA from Apr 2018 (Median) to 22 Jul 2020, with 24 observations. The data reached an all-time high of 3,591.000 NA in 04 Apr 2018 and a record low of 2,751.000 NA in 22 Jul 2020. Russia Domestic Government Bonds: Inflation Linked: 52002RMFS: Days to Maturity data remains active status in CEIC and is reported by Ministry of Finance of the Russian Federation. The data is categorized under Russia Premium Database’s Government and Public Finance – Table RU.FH009: OFZ Auctions' Results. [COVID-19-IMPACT]

Ten-Year Expected Inflation and Real and Inflation Risk Premia is a part of the Inflation Expectations indicator of the Federal Reserve Bank of Cleveland.

Russia Domestic Government Bonds: Inflation Linked: 52002RMFS: Meet Demand Ratio data was reported at 53.537 % in 22 Jul 2020. This records a decrease from the previous number of 66.432 % for 17 Jun 2020. Russia Domestic Government Bonds: Inflation Linked: 52002RMFS: Meet Demand Ratio data is updated weekly, averaging 33.655 % from Jan 2019 (Median) to 22 Jul 2020, with 18 observations. The data reached an all-time high of 66.432 % in 17 Jun 2020 and a record low of 0.000 % in 17 Apr 2019. Russia Domestic Government Bonds: Inflation Linked: 52002RMFS: Meet Demand Ratio data remains active status in CEIC and is reported by Ministry of Finance of the Russian Federation. The data is categorized under Russia Premium Database’s Government and Public Finance – Table RU.FH009: OFZ Auctions' Results. [COVID-19-IMPACT]

This paper, starting from the effects of financial regulatory policies, considers the interaction between Chengxin_Moody and Lianhe_Fitch with the dual rating system and the multi-rating system, constructs a new ordered Logit model, and attempts to explore the impact of the Notice, the dual rating system and the multiple rating system on the probability of Chinese corporate bond defaults, rating upgrades, rating downgrades, and the magnitude of credit rating migrations. This study compares the effectiveness of different rating regulatory systems. Using nine thousand two hundred and sixty-two data of Chinese corporate bonds as the research samples. Empirical analysis and robustness test reveal the following findings: (1) The issuance of the Notice has a significant positive effect on the implementation of both the dual rating system and the multiple rating system, with a greater impact on the implementation of the multiple rating system; (2) The issuance of the Notice, along with the dual rating system and the multiple rating system, can all reduce the probability of corporate bond defaults, with the multiple rating system showing the best preventive effect against corporate bond defaults; (3) The dual rating system is more effective in promoting rating agencies to adjust rating behaviors, accurately correcting corporate bond ratings and effectively alleviating the issue of rating inflation. Competition among rating agencies intensifies rating shopping; (4) Under the dual rating system, rating agencies are more likely to expand the magnitude of credit rating upgrades and downgrades, enhancing the differentiation between high-quality corporate bonds and junk corporate bonds; (5) The selection of rating information from Chengxin_Moody and Lianhe_Fitch can appropriately adjust the degree of flexibility or tightening in response to rating regulatory systems. Chengxin_Moody demonstrates a more sensitive reaction compared to Lianhe_Fitch regarding the rating regulatory systems. This study provides valuable references for the formulation and evaluation of the effectiveness of Chinese corporate bond rating regulatory policies.

The decision to bond or to pay-as-you-go must be made on a case-by-case basis where all of the relevant concerns are taken into consideration. Research has allowed us to develop the following general conclusions: The interest cost of bonding is not outweighed by the effects of inflation. While it is true that inflation causes bonds to be paid back in dollars that are worth less than the dollars that the bonds generated when they were issued, this effect is taken into account when interest rates are determined. Investors would not purchase bonds if they felt that the interest rate did not cover the inflation rate and offer a reasonable return. We could find no evidence that the effects of inflation allow governments to issue cost free debt. In the long run, bonding will result in there being less funds available for other uses. Interest payments impose a real cost on bond issuers. Continual bonding may result in there being less funds available for other uses, but this effect may be outweighed by the benefits bonding affords. The principal benefit of bonding is that it allows projects to be completed sooner.

In 2024, the average yearly yield of UK 10-year government bonds was **** percent. The UK 10-year gilt has shown a significant downward trend from 1990 to 2024. Starting at nearly ** percent in 1990, yields steadily declined, with slight fluctuations, reaching a low of **** percent in 2020. After 2020, yields began to rise again, reflecting recent increases in interest rates and inflation expectations. This long-term decline indicates decreasing inflation and interest rates in Australia over the past decades, with recent economic conditions prompting a reversal in bond yields.

ABSTRACT This paper investigates the drivers of long term real interest rates in Brazil. It is shown that long term yield on inflation linked bonds are driven by yields on 10 year interest rates of United States (US) government bonds and 10 year risk premium, as measured by the Credit Default Swap (CDS). Long term interest rates in Brazil were on a downward trend, following US real rates and stable risk premium, until the taper tantrum in the first half of 2013. From then onwards, real interest rates rose due to the increase in US real rates in anticipation of the beginning of monetary policy normalization and, more recently, due to a sharp increase in Brazilian risk premium. Policy interest rates do not significantly affect long term real interest rates.

This paper models the dynamics of Chinese yuan–denominated long-term interest rate swap yields. It shows that the short-term interest rate exerts a decisive influence on the long-term swap yield after controlling for various macrofinancial variables, such as core inflation, the growth of industrial production, the percent change in the equity price index, and the percentage change in the Chinese yuan exchange rate. The autoregressive distributed lag approach is applied to model the dynamics of the long-term swap yield. The findings reinforce and extend John Maynard Keynes’s conjecture that in advanced countries, as well as emerging market economies such as China, the central bank’s actions have a decisive role in setting the long-term interest rate on government bonds and over-the-counter financial instruments, such as swaps.

We report average expected inflation rates over the next one through 30 years. Our estimates of expected inflation rates are calculated using a Federal Reserve Bank of Cleveland model that combines financial data and survey-based measures. Released monthly.

The yield on China 10Y Bond Yield held steady at 1.83% on December 2, 2025. Over the past month, the yield has edged up by 0.07 points, though it remains 0.16 points lower than a year ago, according to over-the-counter interbank yield quotes for this government bond maturity. China 10-Year Government Bond Yield - values, historical data, forecasts and news - updated on December of 2025.

Russia Domestic Government Bonds: Inflation Linked: 52002RMFS: Weighted Average Price data was reported at 99.447 % in 22 Jul 2020. This records a decrease from the previous number of 100.172 % for 17 Jun 2020. Russia Domestic Government Bonds: Inflation Linked: 52002RMFS: Weighted Average Price data is updated weekly, averaging 95.936 % from Apr 2018 (Median) to 22 Jul 2020, with 23 observations. The data reached an all-time high of 100.309 % in 20 May 2020 and a record low of 92.267 % in 19 Jun 2019. Russia Domestic Government Bonds: Inflation Linked: 52002RMFS: Weighted Average Price data remains active status in CEIC and is reported by Ministry of Finance of the Russian Federation. The data is categorized under Russia Premium Database’s Government and Public Finance – Table RU.FH009: OFZ Auctions' Results. [COVID-19-IMPACT]