[Hong Jang-won's Bull & Bear] A world shaken by US interest rates... Will France be the first to crumble?

A Japanese asset manager sold all its French government bonds over concerns about France's public finances and moved the funds into German and Japanese government bonds. It warns that credit problems in France, the eurozone's 2nd largest economy, could spread throughout the eurozone. Despite its A+ rating, France faces actual borrowing rates higher than Italy's and Greece's, its 10-year government bond spread over Germany is widening sharply, and its debt ratio reached 120% in quarter 2. Unlike the United States, France has little room for either growth or austerity, given its low growth forecast in the 0.4% range and political developments such as prime ministerial resignations and a presidential election. Even its real interest rate exceeds that of the United States. US Treasury Secretary Bessent emphasized that rising interest rates are a global phenomenon and that this is not a market in which only US Treasuries are being sold. Citing how Greenspan's tightening in year 94 exposed Mexico's Tequila Crisis, the host argues that current US Treasury yields are becoming a benchmark that identifies weak links around the world. He says France's problems should be viewed not in isolation but within the global bond ecosystem, because a crisis in France could destabilize all of Europe, which has little room to respond. In that scenario, demand for safe assets could lead to a reassessment of US Treasuries, and he reports that net TLT purchases by US retail investors actually support this view. All directional outlooks are the speaker's conditional judgments, not definitive predictions of short-term prices.