The International Monetary Fund warned Tuesday that government bond yields could rise in a disorderly fashion, as rising inflation, mounting debt and AI-related borrowings pressure sovereign bond markets. Government bond yields in several advanced economies have climbed to multidecade highs. The IMF also noted that global public debt is near its highest level since World War II and is on track to exceed 100% of GDP. The fund highlighted that a sharp rise in yields would have severe consequences, causing asset values to decline through higher discount rates, including for AI-related assets, and eroding the value of government bonds posted as collateral. Hyperscalers’ share of global investment-grade bond issuance has risen to 10% in 2024, from less than 1% previously.
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