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The International Monetary Fund warned of the possibility of a disorderly rise in government bond yields due to pressures from rising inflation, increasing debts, and borrowing related to artificial intelligence. This is especially concerning as yields in many advanced economies have reached levels not seen in decades. The report indicated that these increases could lead to a decline in the value of bond-related assets and the erosion of the value of government bonds used as collateral. Additionally, it highlighted the growing borrowing by artificial intelligence companies, which now accounts for 10% of global bond issuance, further exacerbating pressures on the sovereign bond market and increasing the risks of financial instability and inflation.
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