Rising Bond Yields and Elevated Leverage Spur Financial Stability Warnings

What happened

US 30-year Treasury yields have risen more than 40 basis points this year to around 5.2 percent, the highest since 2007, while leverage across financial markets continues to build. Customer margin debt reached a record $1.5 trillion in June, up 49 percent year over year, and banks held $325 billion in unrealized securities losses in Q1 2026. AI and semiconductor stocks have lost over $3 trillion in market capitalization this year.

Why it matters

The combination of rising yields, record leverage, and a tech-stock correction could expose vulnerabilities and amplify losses, potentially spilling into broader market crises. With US budget deficits at 6 percent of GDP and debt exceeding the economy, authorities and market participants are urged to take precautionary measures to prevent systemic risks.