Global Bond Market Storm Brewing on Inflation, Debt, and Rising Interest Rates

A global bond market storm is brewing, fueled by exploding government borrowing and fiscal deficits. Investors are demanding higher returns to compensate for inflation, fiscal risk, and the sheer volume of debt they're being asked to hold.

The US has crossed the $40 trillion debt threshold, with little evidence that Washington will reverse this trajectory. Across the G7, government debt has reached or exceeded 100% of GDP almost everywhere, including Germany, which is increasingly moving in the same direction.

The situation is complicated by the enormous borrowing requirements of the technology sector. Major US tech companies are turning to bond markets to finance artificial-intelligence investment, potentially raising as much as $1 trillion in European bond markets by 2028.