France 10-Year Government Bond Yield Tops 3.1%

The yield on France's 10-year OAT rose to above 3.1%, the highest level in about a month, tracking a global rise in borrowing costs after the Fed delivered a hawkish view for 2025.

The Fed lowered the fed funds rate by 25bps as expected but signalled only 50bps of rate cuts for 2025, half the reduction projected in September, as inflation is seen taking longer than previously anticipated to reach the target.

Meanwhile, the ECB already cut the key deposit rate four times this year and maintained a cautious stance on further easing.

Still, many analysts believe the ECB may need to accelerate policy loosening to support the fragile Eurozone economy.

Adding to the euro's woes is political uncertainty.

In France, the new government faces big challenges, including passing the 2025 budget.

Moody’s unexpectedly downgraded France's credit rating to Aa3 from Aa2 over the weekend, citing concerns about weakened public finances amid ongoing political instability.