‘What happens in Paris doesn’t stay in Paris!’ Wall Street fears ‘doom loop’ as ‘France is veering toward a full-blown civil crisis’

Wall Street analysts are expressing concern about France’s debt crisis and its potential to spread to other European markets. RBC and Macquarie are warning of a “doom loop” where street protests and rising bond yields feed into each other in a self-reinforcing cycle. French Prime Minister Sébastien Lecornu is set to unveil new fiscal proposals by the end of the month as protests over education spending continue. Italy has revised its 2027/2028 deficit forecasts to 3.4% and 3.2% of GDP, exceeding its April targets by a cumulative 1.2% of GDP, according to Goldman Sachs. Since 10-year yields across major Western economies tend to move together, the fallout from France’s crisis could extend beyond its borders.

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