Source: deVere Group
October 6 2026
France’s borrowing costs smashing through 5% is the starkest sign yet the world’s debt order has flipped, with rich nations now paying the kind of price once reserved for serial defaulters like Argentina.
This is the warning from the CEO of deVere Group, one of the world’s largest independent financial advisory organisations, as France’s 10-year yield tops 5% for the first time since 2002, its premium over Germany records the sharpest weekly jump in 17 years, and the US 30-year Treasury yield pushes above 5.7%.
Nigel Green says: “A founding member of the euro is now borrowing at levels last seen when the single currency was still in its infancy.
“Meanwhile Argentina, the byword for default, has spent this year collecting credit upgrades.
“The bond market has stopped caring about history. It’s judging governments on what they’re doing right now, and the rich world is failing the test.”
The pressure on France is intensifying fast. Its government last week unveiled a 2027 budget with €43 billion of new savings and revenue measures to tackle a deficit running at 5.4% of GDP. Debt interest is already the country’s largest single budget expense, and its fiscal watchdog calls the plan’s assumptions “optimistic.”
A major rating agency reviews France later this month.
Nigel Green says: “France is caught in the trap every indebted government fears. Higher yields swell the interest bill, a bigger interest bill widens the deficit, and a wider deficit pushes yields higher still.
“Every week of political paralysis makes the escape more expensive.
“Argentina has travelled the other way. The country, which has defaulted on its sovereign debt nine times, secured three major credit upgrades in under three months this year, driving its risk premium over US Treasuries to around 420 basis points in July, the lowest in eight years.
“Its economy minister was in Paris last week telling investors the bigger risk was missing out.”
Argentine spreads have since widened again as US yields surged, a reminder the recovery remains fragile.
“Argentina’s turnaround isn’t finished, and its bonds feel every tremor in US yields,” notes the deVere CEO.
“But it slashed spending, turned deficits into surpluses, and crushed triple-digit inflation. Markets rewarded the pain. France has avoided the pain, and markets are punishing it.”
Britain and the US are feeling the same pressure. Britain’s 30-year gilt yield has hit 6%, a 28-year high.
In the US, the Federal Reserve raised rates on 16 September for the first time since 2023, lifting its target range to between 3.75% and 4% as inflation refused to fade.
The US lost its last top-tier credit rating last year, and deficits still run into the trillions.
The deVere CEO says: “America has assumed the world will always fund it at a discount, whatever it spends. Investors are now charging full price, and the Fed’s hike shows inflation is far from beaten.”
Emerging market debt, by contrast, has clearly outperformed developed market government bonds since late August, helped by average inflation in developing economies of around 3.8%.
Nigel Green concludes: “Plenty of emerging economies took their medicine after the last inflation shock. They raised rates early, tightened budgets and absorbed the political backlash.
“Much of the developed world borrowed its way through, and the bill is landing now.”
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of offices around the world, more than 80,000 clients, and $14bn under advisement.