Soaring bond yields, gaping deficits and towering debts: what could go wrong?

Rich-world bond yields have jumped: on September 14th the US 10-year Treasury exceeded 5%, a two-decade high; the median rich-country 10-year yield is above 4%, highest in more than 15 years and about five times the 2015–21 average. This coincides with advanced-economy gross public debt near 110% of GDP (from ~70% in the early 2000s). America is expected to run a ~6% of GDP deficit this year, France more than 5%. The Fed raised rates by 0.25pp on September 16th; the ECB had hiked the week before. Governments must sell more than twice as much debt relative to GDP as in 2007 at similar yield levels. OECD interest payments already exceed 3% of GDP on average and nearly 5% in America; term premia have climbed, with America's estimated at a decade-plus high. The piece explores refinancing risk as low-coupon debt rolls off.