Markets

European Managers Cut U.S. Treasury Exposure as Yields Hit 5%

By Markets Desk · 2026-09-19 · 2 min read

A stack of government bond certificates resting on a wooden desk next to a globe — Illustration: Tradingbird

The 10-year U.S. Treasury yield reached 5 percent, prompting European asset managers to reduce holdings of American government debt.

The 10-year U.S. Treasury yield reached 5 percent on Friday. This level marks the highest point since 2007. U.S. federal debt has exceeded 40 trillion dollars. European financial institutions are reassessing their risk exposure. The traditional view of Treasuries as risk-free assets is under pressure. GN auto markets/bonds: treasury yields data confirms the sharp rise in borrowing costs. Several major asset managers have adjusted their portfolios in response.

Norway’s sovereign wealth fund manager, Norges Bank Investment Management, proposed a significant shift. The fund plans to reduce its government bond benchmark share from 70 percent to 50 percent. The specific weighting for U.S. government bonds will drop to 21.9 percent. This is a reduction from the previous 34.1 percent. The fund intends to increase exposure to non-government debt. Mortgage-backed securities are part of this new allocation strategy. This move reflects a broader trend among European investors.

Swiss and British firms trim long-dated debt

Swisscanto Asset Management reduced exposure to long-dated U.S. Treasuries. The 30-year yield broke above its previous trading range. The firm found Australian government bonds more attractive. Brown Shipley maintains a tactical underweight position in U.S. Treasuries. Higher energy prices drive this decision. Elevated government borrowing is another factor. Persistent geopolitical uncertainty plays a role in their assessment.

BlackRock’s head of global fixed income stated bonds are less risk-free. A private corporation with the U.S. fiscal position would not be viewed as risk-free. Kristina Hooper at Man Group identifies reduced Treasury exposure as a key trend. Uncertainty surrounding U.S. policy contributes to investor unease. Some U.S. allies are relocating part of their gold reserves. This action reflects broader concerns about asset safety.

Buyback programs fail to lower long-term costs

BNP Paribas Wealth Management attributes the yield rise to higher capital demand. A higher term premium also contributes to the increase. Uncertainty over Federal Reserve policy is a driving factor. The U.S. Treasury’s expanded buybacks of longer-dated securities are viewed as temporary. These measures are unlikely to have a lasting impact on yields. The institution maintains a 12-month target of 4.50 percent for the 10-year yield. Yields could temporarily approach 5 percent in the coming months.

Based on reporting by Macau Business, compiled by the Tradingbird desk.