France's 10-Year Bond Yield Tops US Treasuries for First Time Since 2013

France is paying more to borrow than the United States for the first time since 2013, as violent protests and political uncertainty drive up the cost of its government debt. The yield on 10-year French government bonds hit 5.11% on Thursday, surpassing the 5.06% yield on 10-year US Treasuries and marking France's highest borrowing rate in 24 years. The spread between French and German government borrowing costs widened to its widest level since November 2011, during the eurozone sovereign debt crisis. The surge follows nationwide riots and looting, alongside concerns that a populist, free-spending candidate could win next year's presidential election. Investors are also worried about France's ability to repair its public finances as policymakers struggle to pass a budget featuring €54 billion in cuts, with the deficit exceeding 5% of GDP and government debt near 120% of GDP. Economists at ING said the rise in French borrowing costs is having the same effect on growth and inflation as a European Central Bank rate hike of roughly 50 basis points. The ECB is widely expected to hold rates at 2.5% at its Oct. 29 meeting.