IMF's Georgieva says rising bond yields threaten progress on developing country debt
TLT•Rising yields could undo debt progress
IMF Managing Director Kristalina Georgieva told Reuters that ballooning debt and rising bond yields in advanced economies are threatening to undo developing and low-income countries' progress in reining in their own debts.
Georgieva said in an interview late on Tuesday on the sidelines of a G20 finance leaders meeting in North Carolina that bond yields are being driven upwards by higher overall debt levels, continued inflation pressures from the still-closed Strait of Hormuz, and competition for capital from AI-related debt issuance.
“This is not just a low-income developing countries problem,” Georgieva said. “High debt levels in advanced economies, combined with stubborn inflation, could lead to debt service costs going up for everybody, including for the low income, for the emerging markets and developing economies.”
U.S. government bonds have sold off in recent weeks, pushing the 30-year U.S. Treasury yield US30YT=RR to near two-decade highs.
