Yields on U.S. Treasurys turned slightly lower in European midday trade but continued to hover near 24-year highs, while European government bond yields followed suit as investors took a breather in the bond market rout.

U.S. Treasury yields have been swinging between relief and fresh highs since Wednesday's lower-than-expected U.S. PCE inflation data for August and an upward revision to second-quarter GDP data that underpinned the resilience of the U.S. economy.

The 10-year Treasury yield was last 1.4 basis points lower at 5.279%, while the 30-year yield stood at 5.629%, according to Tradeweb. Earlier in the day, the 10- and 30-year yields climbed to 24-year highs of 5.342% and 5.683%, respectively.

In Europe, the 10-year German Bund yield fell 1.7 basis points to 3.562%, nonetheless staying close to the 3.653% level it reached earlier this week, the highest since mid-2009. The yield on 10-year and 30-year U.K. government bonds earlier hit their highest levels since 2007 and 1998, respectively, before turning slightly lower.

"Despite economies being at very different points in their respective cycles, the selloff has been remarkably broad-based, with relatively little dispersion across markets," said Helen Anthony, portfolio manager on the Core Plus Team at Janus Henderson Investors.

"The move higher in yields has been relentless over recent months, with buyers largely remaining on the sidelines," she said.

The risk of prolonged inflation due to high oil prices, prospects of higher interest rates and concerns about elevated debt levels are all factors which have pushed yields higher. Investors also are worried about increased supply of government bonds at a time of huge corporate bond issuance to fund AI-related infrastructure projects.

The rise in U.S. Treasury yields to multi-decade highs "reflects more than monetary policy," YCC Capital Management said in a note.

"Resilient U.S. activity, renewed energy-price risk, a Federal Reserve increasingly uncomfortable with inflation, and an extraordinary AI infrastructure investment cycle are all competing for capital at the same time," it wrote.

"The 'higher for longer' rate environment has become 'much higher for a lot longer'," JoAnne Bianco, senior investment strategist at BondBloxx Investment Management, said in a note.

European investors also are watching French government bonds, where budget concerns weigh on investors' confidence, pushing the spread between 10-year French and German government bond yields as high as 133 basis points, a 14-year high, before retreating to 128 basis points.

Bonds are choppy and the widening French-German yield spread is "concerning," said Erik Liem, rates strategist at Commerzbank. "The French budget proposal looks set to add some fundamental spice to the current dynamics."

France's Budget Act for 2027 is scheduled to be presented Thursday, with a public deficit target of 5% of gross domestic product.

Meanwhile, investors are assessing whether high yields make bonds attractive or whether the risk of yields rising further is too great.

Long-dated Treasury yield levels above 5% are both a warning and an opportunity, said Mark Malek, chief investment officer at Siebert Financial.

"Existing bondholders have absorbed painful price declines, but new capital can now lock in yields unavailable for much of the past two decades," he said.