The chart displays the 5-year average of 10-year bond yields for the U.S., Japan, Germany, the U.K. as of December 2023. The chart also shows the 5-year high, low, and current yield. Current yields have fallen below the 5-year highs for all countries shown.
Sources: Bloomberg and Wells Fargo Investment Institute, as of December 31, 2023. For illustrative purposes only. Yields represent past performance and fluctuate with market conditions. Current yields may be higher or lower than those quoted above. Past performance is no guarantee of future results. Bonds are subject to interest rate, credit/default, liquidity, inflation and other risks. Prices tend to be inversely affected by changes in interest rates. Although Treasuries are considered free from credit risk they are subject to other types of risks. These risks include interest rate risk, which may cause the underlying value of the bond to fluctuate. Investing in foreign securities presents certain risks not associated with domestic investments, such as currency fluctuation, political and economic instability, and different accounting standards. This may result in greater share price volatility.
Key Takeaways
- 10-year German bunds performed well in the fourth quarter. Japanese government bond yields and 10-year U.K. gilts also rallied on the weaker dollar and lower U.S. interest rates.
- Yields may start to decline further once a recession hits and a pause in central-bank rate increases is confirmed.