A senior IMF official said rising government bond yields have become the biggest
emerging risk to global financial stability. Asanastios Vamvakidis, deputy
director of the IMF’s capital markets division, said yield increases since the
IMF’s April assessment are the clearest change in the risk outlook. He flagged
other growing vulnerabilities, including the risk of an AI-driven market
pullback, but called the sharp rise in sovereign yields a more direct and urgent
threat. With the US‑Iran conflict pushing up inflation and central banks
responding with rate hikes, borrowing costs in the US, Europe and Japan have
risen to multi-decade highs, raising investor concern that high debt levels
combined with rising refinancing costs will intensify fiscal pressure on
governments.
