LEAD · WEALTH

Paris, London and Washington all paid more for money this week. Why the bond market is now writing budgets, and how to plan when nobody knows which way it breaks.

BY MEHMET ISTANBULLU · ABOUT 7 MINUTES

At 9:14 a.m. GMT on Wednesday, the yield on France’s 10-year government bond touched 5.002%. It was the first time since 2002 that investors demanded 5% a year to lend to Paris for a decade. ^[1] By late morning in New York the yield stood at 5.01%, and the premium over German Bunds, about 1.6 percentage points, was the widest in 15 years, according to Bloomberg data cited by Axios. ^[2]

Paris was not alone. That afternoon the U.S. Treasury sold $13 billion of 20-year bonds at 5.469%, up from 5.420% in September. ^[5] No 20-year auction has paid more since the bond returned in 2020. ^[6] In London, figures published the same morning showed inflation rising and the government borrowing more than planned. ^[7]

WHAT HAPPENED IN FRANCE

The trigger is politics as much as arithmetic. France ended last year with a deficit of 5.1% of GDP and is under the European Union’s excessive deficit procedure. Prime Minister Sébastien Lecornu, who resigned and was reappointed, is seeking 54 billion euros ($60.6 billion) of savings, and last weekend’s protests ended in riots and looting. ^[3] The 2027 budget, debated in the National Assembly since Oct. 13, aims for a deficit of 5% of GDP with 43 billion euros of new measures; a Socialist motion to throw it out failed by 236 votes to 149. ^[4]

On Wednesday, Economy Minister Roland Lescure told RTL the government would use “guardrails,” including Article 49.3 of the constitution, which lets a government pass a budget without a vote unless it loses a confidence motion. “I’m convinced of this because we have no choice,” he said. “If we veer off course, we’ll activate the guardrails.” ^[3] If parliament has not finished within 70 days, the government may enact the budget by ordinance, possible from Dec. 18. ^[4] Markets are also pricing the next election: prediction-market odds that Marine Le Pen becomes president stood at 46% on Polymarket, up from 5.5% in June, ^[2] and she says the deficit could fall below 3% within 18 months. ^[3]

WHY IT MATTERS

A government bond is the floor under every other price. When the state pays 5%, banks, landlords and companies borrowing in that currency pay more, and every investment has to clear a higher bar. In Britain, inflation rose to 3.5% in September from 3.1%, the highest since October 2025, with petrol at 169.5 pence a liter and diesel at 192.5 pence. September borrowing was £24.5 billion ($32.8 billion), £6 billion above the official forecast for the year so far, and debt is above £3 trillion. Chancellor John Healey presents his first Budget on Oct. 28, after pledging not to raise income tax, national insurance or VAT. ^[7] The Bank of England has held its rate at 3.75% for six meetings, and a rise is now expected on Nov. 5. ^[8]

For owners and boards in the Gulf, Turkey and Central Asia, the transmission is direct. Euro and dollar loans reprice off these benchmarks; a property bought with five-year money in London or Paris is refinanced at today’s rates, not 2021’s; and a French government that cannot pass a budget is a counterparty risk for anyone selling to the French state or holding its paper. A higher floor also changes the case for doing nothing: cash and short bonds now pay more than many projects return.

PROFILE: THE MAN WHO GAVE 3% TO WHAT HAPPENED

Mohamed El-Erian, who teaches at Wharton, advises Allianz and was chief executive of PIMCO, the bond house, spent this month’s One Decision podcast explaining the global bond sell-off. ^[9] His most useful minutes are about Lehman Brothers. The weekend before it collapsed, he recalls, PIMCO’s team sat with three scenarios on the board: Lehman does not default, defaults in an orderly way, or defaults in a disorderly way. The room gave 85% to the first. The first two, “neither of which happened,” added up to 97%; “we only gave 3% to what actually happened.” ^[9]

PIMCO came through, he says, not because it predicted the crisis but because “we had an action plan for every single scenario.” When it became clear late on Sunday that the third scenario was coming, “we knew exactly who was going to do what when.” His conclusion: “you need this optionality mindset — to say, I don’t know, this is a fundamentally uncertain world.” ^[9] It is the right frame for a week in which three G7 bond markets moved at once.

BEST MOVES

WHAT TO WATCH

IN BRIEF

DEFENSE

Turkey plans to ask parliament for a mandate to send military personnel to Saudi Arabia once the Mecca defense pact is ratified, an official of the ruling AK Party said, in a plan first reported by Reuters. The first to go would be technical personnel for air defense and electronic warfare, the official said, with no offensive operations. ^[12]

In Doha, Turkey, Qatar, Pakistan and Indonesia signed a memorandum, named Badr, to produce weapons together, Middle East Eye reported. Qatar is to bring funding and technology, production would be in Turkey, and an executive board and a strategic board will run it. Turkey’s defense minister, Yaşar Güler, and Haluk Görgün, head of its defense industry agency, signed for Ankara. ^[13]

The move: If you make defense components, ask how Badr’s boards will choose projects; with production in Turkey and Qatari money behind it, Turkish suppliers are the likeliest first partners. ^[13]

TURKEY

Turkey’s central bank announces its rate decision this afternoon. Its one-week repo rate has been 37% since January, unchanged at five meetings. A BloombergHT survey of 17 institutions found all expecting a cut, 15 by one percentage point and two by 1.5 points. Garanti BBVA’s chief executive, Mahmut Akten, also expects one point. S&P Global Market Intelligence dissents: its economist Andrew Birch expects a hold, citing high inflation expectations and a weaker lira. ^[14]

Annual inflation fell to 29.73% in September, the first reading below 30% since late 2021. ^[15] The bank publishes new forecasts on Nov. 12 and holds its last meeting of the year on Dec. 10. ^[14]

The move: If you hold lira deposits or borrow in lira, ask your bank today how fast it will reprice after a cut, and lock terms you like before it does.

TECH

A New Mexico judge, Francis Mathew, ordered Meta to pay $25 billion after a jury found the company misled consumers about their data. He said more than $219 billion could have been justified, and reduced it. Meta had urged a cap of $3.45 billion. ^[16]

In September the jury found 26 of 29 statements misleading and counted more than 43 million violations, each punishable by up to $5,000; the money is to go to schools. The case reached back to Cambridge Analytica, which harvested data on up to 87 million Facebook users. Attorney General Raúl Torrez welcomed the ruling; Meta is expected to appeal. ^[16]

The move: Ask your legal team to check what your company tells customers about their data; New Mexico counted each misleading statement one user at a time. ^[16]

PROFILE

Roland Lescure spent eight years running investments for Quebec’s pension giant. Now he has to convince the people on the other side of that desk.

Roland Lescure at the European Commission, Sept. 29, 2022. Photo: © European Union, 2022 (Lukasz Kobus, European Commission Audiovisual Service), CC BY 4.0, via Wikimedia Commons; cropped and toned (license)

Roland Lescure has been France’s minister for the economy, finance and industrial, energy and digital sovereignty since Oct. 12, 2025. Born in Paris on Nov. 26, 1966, he studied at the École polytechnique, at ENSAE, the national school of statistics and economics, and at the London School of Economics. ^[17]

Unusually for a French finance minister, he spent most of his career as an investor. After five years at the finance ministry and two at INSEE, the statistics office, he managed money at Ixis, Natixis and Groupama Asset Management, then served from 2009 to 2017 as first vice president and chief investment officer of the Caisse de dépôt et placement du Québec, which invests Quebec’s public pension savings. ^[17] He holds French and Canadian citizenship and was first elected in 2017 to represent French citizens in Canada and the United States. ^[18] He chaired the National Assembly’s economic affairs committee until 2022 and was industry minister from 2022 to 2024. ^[17]

This year he has argued for French pension funds, to reduce reliance on American capital. ^[18] On Wednesday he said the government had “no choice” but to pass a budget, and would use its “guardrails” if needed. ^[3]

The move: Read the French budget as he will present it, to investors: watch for a date and a deficit number, and whether both survive Moody’s review on Friday.

TECH

Samsung’s Galaxy Buds On, its first open-ear earbuds, go on sale in South Korea on Oct. 27 for 299,000 won (about $225), in black only. They hook over the ear on a band of shape-memory alloy instead of sealing the canal, so the wearer still hears traffic and the room. ^[19]

Each bud has two woofers, three microphones and a vibration sensor to pick out the wearer’s voice on calls, and it works with Google’s Gemini Live assistant. ^[19] Samsung has not said when they will sell elsewhere. ^[20]

The move: If you take calls while walking or traveling, open-ear buds are worth a trial, because you stay aware of the street, the gate announcement or the person beside you. Wait for independent reviews of call quality in wind and crowds before you buy.

PROPERTY

British inflation rose to 3.5% in September, above forecasts, and markets now expect the Bank of England to raise its rate from 3.75% when it meets on Nov. 5, after six holds. Core inflation was 2.8% and services inflation 3.7%. About 1.8 million fixed-rate mortgages are due to end this year, Mortgage Professional reported. ^[8]

The Budget comes first, on Oct. 28. September borrowing ran £6 billion above the official forecast, and the chancellor, John Healey, has pledged not to raise income tax, national insurance or VAT, so any new revenue must come from elsewhere. ^[7]

The move: If you own British property with a fixed rate ending in the next six months, ask your broker to reserve a new rate now; many lenders let you switch to a cheaper deal before completion if rates fall.

SCIENCE

Worms kept at 15°C instead of 20°C live longer, and a team led by David Vilchez of the University of Cologne has found part of the reason. In the cold, muscle makes more of a molecule called BH2, which travels to the gut and nerves and is converted there into BH4, a helper that lets an enzyme make the amino acid tyrosine. Raising BH2 production in muscle alone extended the worms’ lives even at normal or warmer temperatures, and tyrosine added to their food did too. ^[21]

In human cells, BH2 or tyrosine reduced the clumping of proteins linked to Huntington’s disease and ALS, and reduced cell death in motor neurons grown from stem cells with an ALS mutation. ^[21] Nature ran an independent commentary alongside the paper. ^[22]

The caveat: this is worms and cells, not people. Nobody should start a tyrosine regimen on the strength of it; watch instead for animal studies in mammals.

TRAVEL

Gulfstream expects to assemble 160 aircraft this year and is “well on the path” to exceed that, its president, Mark Burns, told Aviation Week at the NBAA business-aviation show in Las Vegas. “Demand is not the concern right now. If we can build more airplanes tonight, we can sell more airplanes today,” he said. Its factories can build wings for more than 200 a year, and he expects growth in 2027, 2028 and 2029. ^[23]

Since the G700 was certified in March 2024, 135 have been delivered; the G800, certified in April 2025, has 35 deliveries. Two smaller models, the large-cabin G400 and super-midsize G300, are in flight tests. ^[23]

The move: If you are weighing a large-cabin jet, ask for a delivery slot in writing before you negotiate price; when the maker says demand exceeds output, the slot is the scarce part.

LISTEN

The Daily (The New York Times) · Wed., Oct. 21 · 32 min

With the economy among voters’ top issues before the U.S. midterms, and President Trump telling Americans they are wrong to be frustrated about the cost of living, Ben Casselman, The Times’s chief economics correspondent, explains what the latest data actually says. ^[24] A useful half hour for anyone who has to read American demand from abroad, on a day when Treasury paid 5.469% for 20-year money.

Listen to the episode →

LISTEN

The Koerner Office (Chris Koerner) · Tue., Oct. 20 · 36 min

A year after asking listeners to tell him about businesses they started because of the show, Chris Koerner goes through 11 of them: a man who turned broken brick mailboxes into $800,000 in two years while keeping his day job, a $500,000 pickleball-court company in Nebraska, and one that failed. For each he covers what to charge, where to find the first customer and the one tool needed. ^[25] Worth it for anyone mentoring a young founder: small, unglamorous services, priced well.

Listen to the episode →

READ

Robin Wigglesworth · Portfolio · Sept. 29, 2026 · 416 pages

Wigglesworth, a veteran Financial Times journalist, tells the history of the debt markets that most people find the “boring” corner of finance. ^[26][27] In a week when France paid 5% and the bond market set the terms for three governments, this is the background reading on why lenders, not voters, so often have the last word.

See it on Amazon →

READ

Simon Sebag Montefiore · Knopf · Sept. 29, 2026 · 528 pages

The historian runs from the capture of Riyadh in 1902 to the wars of 2026, from Morocco to Iran, with Turkey, the Gulf monarchies and Iran in the same story as Palestine. Calder Walton, reviewing it for Harvard’s Belfer Center, calls it “panoramic without becoming bloodless” and singles out its treatment of intelligence services as kingmakers. ^[28][29] For anyone doing business across the region, it is the long view that daily news cannot give.

See it on Amazon →

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The Other Post: The Daily Briefing for the Conscientious Leader, through an Istanbul lens, is independent analysis for decision-makers. Nothing here is investment, legal or medical advice. Issue No. 8 · © 2026 Mehmet Istanbullu