Bond markets are experiencing significant volatility, with yields on long-term government bonds reaching levels not seen in over a decade. The yield on 30-year US Treasury bonds briefly surpassed 5.3%, the highest since 2007, prompting the US Treasury Department to increase purchases of longer-dated debt. This trend is not limited to the US, as yields on British, French, German and Japanese bonds have also surged, raising concerns about rising borrowing costs for governments.

European Central Bank President Christine Lagarde has emphasized the need for Europe to invest in artificial intelligence to avoid missing out on the economic benefits. Lagarde noted that euro-area companies plan to allocate about 9% of total investment to AI this year. "Europe largely missed out on the first digital revolution, as the commercial gains from the spread of information and communication technologies were captured disproportionately elsewhere," Lagarde said.

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The Reserve Bank of India has signaled a possible interest rate increase, surprising investors and causing bond yields to rise. Minutes from the RBI's August meeting indicate a growing concern about inflation, with Deputy Governor Poonam Gupta suggesting a rate hike later this year. This hawkish shift contrasts with recent statements from RBI Governor Sanjay Malhotra, who previously indicated that inflation is manageable.

Chinese government bonds are gaining diversification appeal as yields edge lower while borrowing costs in the US, Japan and UK climb to multidecade highs. Strategists say China's deflationary pressures, supportive central bank stance and insulation from global capital markets could keep its debt on a different path from developed-market peers.

US government debt surpassed $40 trillion for the first time, more than doubling over the past decade as large deficits and rising interest costs strain federal finances. The milestone comes as higher US Treasury yields, AI-linked corporate borrowing and inflation concerns increase pressure on government funding costs and long-end debt markets.

US Federal Reserve officials indicated in July that an interest-rate hike might be necessary if inflation does not decrease, according to minutes of the US Federal Open Market Committee's July meeting. The FOMC voted 9-3 to keep the federal funds rate at 3.5% to 3.75%, but dissenters favored a 25-basis-point increase. Since the meeting, inflation has remained above the Fed's 2% target, while employment has softened. The minutes also mention a discussion about possibly reducing the number of FOMC meetings each year.

Global bonds rebounded after the US Treasury said it would double its buybacks of long-duration debt, easing a sell-off that had pushed 30-year yields to their highest level since 2007. The move lifted stocks and pressured the dollar, though investors warned the relief may be temporary, as debt supply, AI-related borrowing, and inflation risks continue to weigh on long-end markets.

At the White House Innovation Meeting, US President Donald Trump highlighted the administration's active efforts to build a comprehensive US crypto framework. He emphasized the need for a clear regulatory environment to keep American crypto and AI industries at the forefront globally and pointed to the US strategic Bitcoin reserve as a sign of the administration's commitment to the industry.

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