IMF warns bond yields could see a 'disorderly' spike as debt, inflation risks worsen

The IMF warned in its Global Financial Stability Report that sovereign bond yields could rise sharply and disorderly amid record debt, resurgent inflation and heavy AI-related borrowing. Hyperscalers' share of global investment-grade bond issuance has risen to 10% from less than 1% since 2024, while hedge funds now hold about 9% of U.S. Treasuries.

• IMF: bond market is susceptible to more frequent fiscal and inflation shocks
• Hyperscalers' share of investment-grade issuance rose to 10% from under 1% since 2024
• Hedge funds' share of U.S. Treasuries rose to about 9% from 4% in 2022
• Japan's government bond liquidity has continued to deteriorate