E8 | Global Macro | Why are global long-term interest rates rising? | The structure of 'capital demand' created by crude oil, fiscal policy, and AI
FX Battlefield Editor | E8 | 2026.10.01
◆Conclusion
What is happening in today’s global market is,
not just a rise in interest rates in the United States.
The United States.
The United Kingdom.
France.
Government bonds are being sold off in multiple countries, and long-term interest rates are rising.
The U.S. 10-year Treasury yield briefly rose to **5.34%**. Market data also shows the U.S. 10-year reaching the 5.3% range on October 1st.
Let’s change the question here.
Why are long-term bonds being sold off so heavily?
It cannot be explained by a single reason.
The current bond market is experiencing,
inflation
+
crude oil
+
strong demand
+
fiscal deficit
+
government bond supply
+
AI/capital investment
all overlapping at the same time.
In other words, the current rise in long-term interest rates,
if viewed only as ‘because central banks are raising rates’,
will cause you to lose sight of the structure.
The main battlefield has expanded from policy rates to the issue of,
who will absorb the ever-increasing global demand for capital, and at what interest rate?
The problem is spreading.
◆Global Bonds | Not just the United States
The characteristic of today is
that bond selling is spreading globally.
This is significant.
If it were only the United States,
Fed
↓
US interest rates
↓
Dollar
could be explained by this path.
However, if long-term interest rates are rising simultaneously in multiple countries, that alone is not enough.
The market is
not only the monetary policy unique to each country
but also
the common global factors for rising long-term interest rates
starting to score.
◆ The First Structure | Inflation Is Not Over
The August PCE slowed down.
However, that does not mean the inflation problem is over.
What is strengthening again now is
energy.
It can be confirmed from market data that Brent crude oil is near $100 as of October 1st.
The path is simple.
Crude oil ↑
↓
Transportation/production costs ↑
↓
Price pressure ↑
↓
Future inflation uncertainty ↑
↓
Required yield for long-term bonds ↑
What is important is that
the slowdown in PCE and the rise in crude oil are not contradictory.
Even if current prices are slowing down,
future price risks
rising can be a selling factor for long-term bonds.
◆ The second structure | Fiscal policy and government bond supply
Next is the government side.
The government has a large fiscal deficit.
↓
Funds are needed.
↓
Government bonds are issued.
↓
The market needs to absorb a large amount of government bonds.
The question is,
at what yield will investors buy?
is.
As the supply increases,
the yield demanded by the market also becomes important.
Therefore, long-term interest rates are,
It is not just central banks, but also
government funding demand and bond market supply and demand
that influence it.
This is the part that gets missed if you only look at monetary policy.
◆ The Third Structure | AI ‘uses capital’
And this time, what is particularly important is AI.
AI is usually discussed as a
growth theme
.
However, from the perspective of the bond market, it is different.
AI
↓
semiconductors
↓
data centers
↓
power equipment
↓
power grids
↓
cooling equipment
↓
massive capital investment
In other words,
AI is also a massive source of capital demand.
If growth expectations rise, investment also increases.
If investment increases, capital becomes necessary.
Therefore, the AI investment boom contains both
an aspect that boosts growth rates
and
an aspect that absorbs massive amounts of global capital
at the same time.
This is the important point.
◆ Seeing the big picture in one chart
If we summarize current long-term interest rates in one chart,
Crude oil/Energy
↓
Inflation risk
+
Strong demand
↓
Economic resilience
+
Fiscal deficit
↓
Government bond supply
+
AI/Data centers
↓
Capital investment
↓
Demand for funds
These converge to create,
increased demand for long-term capital
and
increased supply of bonds
simultaneously.
As a result,
higher yields are being demanded.
Thinking in terms of this structure, the current global rise in long-term interest rates all connects together.
◆ Regime | You cannot read the market just by ‘waiting for rate cuts’
What is important from here on is,
Distinguishing between policy rates and long-term interest rates.
Just because central banks are moving toward rate cuts,
long-term interest rates will not necessarily fall in the same way.
It is not that simple.
For long-term interest rates,
the economy,
inflation,
fiscal policy,
government bond supply and demand,
capital investment,
and capital demand
all exert different forces.
Therefore,
the Fed’s next move
alone is not enough to explain long-term interest rates, as it only shows a part of the market.
◆E8 Structural Scoring
Inflation
Risk of re-acceleration exists.
Crude oil
Upward trend. Reconnecting to the inflation path.
Economy
Continuing to monitor the durability of demand.
Fiscal policy
Cannot be ignored when considering long-term interest rates.
Government bond supply and demand
Importance is rising.
AI
It is not just a stock market theme.
Connecting to the bond market as massive physical investment and capital demand.
Long-term interest rates
Cannot be explained by monetary policy alone.
◆ What we will observe from now on
The focus going forward is
not just whether interest rates will rise or fall.
It is not just that.
What we should look at is
what moved interest rates.
Is it crude oil?
Is it inflation?
Is it the economy?
Is it the central bank?
Is it fiscal policy?
Is it the supply and demand for government bonds?
Is it AI investment?
If the cause is different,
Even with the same rise in interest rates, the meaning for the market changes.
Let’s break this down.
◆ A word from the battlefield
The subject of high interest rates is no longer just central banks.
What we look at next is not the interest rate figures.
Who needs global capital, and how much?
This article is intended for the research and recording of market structures and does not recommend any specific investment actions.
E8 does not provide future forecasts or trading instructions, but is an analytical framework for observing what the market is scoring and organizing its structure.
Please make investment and trading decisions at your own risk.
──────────────────────────────────
The text, structure, analytical system, framework, unique concepts, and expressions contained in this article belong to Battlefield Editor | E8.
Citations are welcome provided the source is clearly stated. Unauthorized reproduction, full duplication, modified redistribution, or use for commercial purposes is prohibited.
──────────────────────────────────
FX Battlefield Editor | E8
News / Regime / Market Scoring / Order Flow / Real Demand Flow / Stop Structure / Time Zone Characteristics / RR Design
Observe the battlefield through 8 observational elements and edit the structure through market scoring.
Record the market as a battlefield console and verbalize the causality.