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Property developers in the United Arab Emirates are raising billions through a growing arsenal of funding tools — from Islamic bonds to private credit — as they ride one of the Gulf country’s longest real estate booms in years. Data compiled by Bloomberg show dollar bond and sukuk issuance alone has grown more than twelve-fold to $6bn since 2021, underscoring how widely developers have accessed the market in a short time.Names once unknown to international debt capital markets, including Arada Developments, Binghatti Holding and Omniyat Holdings, are now regular sukuk issuers, joining heavyweights like Emaar Properties, Aldar Properties, and Damac Properties. More new names like Samana Developers are planning to test capital markets, and Arada is even weighing a convertible sukuk, a rare move in a region still new to equity-linked financing. Many firms are racing to get more cash to buy land as the competition to secure prime locations in the UAE intensifies. Their push into new pockets of the credit market highlights a growing role for local and international bond investors in Dubai real estate. Property prices have already risen more than 70% since 2019 in the city, and are also surging in the emirates of Abu Dhabi and Sharjah. Still, the flood of issuances has created a growing wall of maturities, with about $8bn due by 2030. Some analysts have flagged rising risks from Dubai’s extended boom, though most say the sector’s fundamentals remain solid for now. The emirate continues to see record pre-sales and strong inflows from wealthy overseas buyers, boosting developers’ profitability and cash buffers. “The demand for UAE real estate bonds and sukuk is unlikely to dry up anytime soon,” said Apostolos Bantis, managing director of fixed income advisory at Union Bancaire Privee. “Global investors remain attracted to higher-quality developers offering yields that stand out compared to developed markets.” At the same time, a global slowdown, regional unrest, or a drop in oil prices could sap confidence and leave some homebuyers exposed if any developers struggle to deliver. A wave of new property supply has also led Fitch Ratings to forecast a “moderate correction” in late 2025 into 2026. UBS Group AG has warned that Dubai’s bubble risk has surged since 2022, though the city still sits below the bank’s “high-risk” category, helped by strong rental yields and comparatively affordable home prices. In debt markets, the flood of new real-estate sukuk deals could test market appetite, particularly as investors look to avoid over-exposure to a single sector. Fady Gendy, fixed-income portfolio manager at Arqaam Capital, said the large volume of deals this year has led to some signs of “investor fatigue,” apparent in how some recent deals have been trading below their re-offer price and with higher new issue premiums paid.“This is to be expected after the large volume printed from the sector this year, and that being concentrated across a few names,” he said. None of that is deterring developers who want to raise money in the short term. For many, private credit has emerged as a vital new source of liquidity as traditional banks approach their real estate exposure limits.Omniyat tapped Nomura for a $100mn private credit facility earlier this year, and private credit specialists say most of the current demand in the UAE is coming from developers. “Banks have hit sector limits and are prioritising lending to large, government-backed developers,” said David Beckett, head of origination and Middle East business development at asset manager SC Lowy. “That leaves private developers underfunded, but they’re seeing strong returns and are willing to pay private credit spreads.” Some firms are looking beyond debt markets to potential listings, although no definitive plans have been announced yet. Binghatti, Samana and Arada are among those weighing possible initial public offerings.Gendy would see a rise in IPOs as a welcome shift, not only to potentially provide fresh injections of capital, but also to strengthen transparency and corporate governance. One key risk to watch, he added, will be dividend policy, to ensure developers maintain sufficient buffers for any future downturns. Investors are no strangers to the Dubai property sector’s swings: Damac Properties was taken private in 2022 at a sharp discount to its original listing value. Despite potential challenges, real estate investors and developers are counting on demand to hold up, partly because expats continue to pour into Dubai and the nearby emirates. Gendy stressed that near-term sector fundamentals remain intact, and concerns about a potential supply glut in 2026 or 2027 may be overblown, as actual new developments typically fall short of projections. “That said, if there is a more severe correction, we would expect to see some dispersion in market pricing between the various real estate issuers, on account of differences in their business models, and operating and financial metrics,” Gendy said about the bonds the builders are issuing. 

The reform of the Dutch pension system may result in a selloff in long-maturity bonds and interest-rate swaps, the European Central Bank (ECB) warned Wednesday.The ECB wrote in its Financial Stability Review that demand for these securities will drop as Dutch pension funds shift from a defined benefit to a defined contribution model to better suit the needs of an aging population.While the changes have been well-flagged and are playing out over several years, the Dutch pension system has a large footprint in European rates markets. It accounts for about 65% of euro area pension funds’ sovereign bond holdings, according to the ECB.Shifts in demand for bonds are in particular focus given the pivot among European governments toward bigger defence and infrastructure spending, against a backdrop of higher debt sales globally. Long-maturity yields rose to multi-year peaks around the world earlier in 2025 amid bouts of volatility.With central banks — including the ECB — shrinking the bond portfolios accumulated during the years of quantitative easing, there’s now greater impetus on private buyers to absorb the supply hitting the market.“There is lower demand for longer-dated debt from some institutional investors, notably Dutch pension funds,” the ECB wrote in Wednesday’s report. “As a result, investors may require higher yields to absorb new issuance or a compressed maturity profile.”So far, a repricing in the euro swaps curve has been orderly. Still, the ECB is not the only market observer to warn of potential price swings as the transition advances.The Dutch central bank has said it’s working with the sector “to ensure a smooth and careful transition,” while Bank of America Corp has said it will keep trading desks fully staffed over the end-of-year period to be ready for potential volatility.The transition will be split across the next two years. The early part of 2026 is seen as a key test with about 35% of the Dutch pension sector’s assets due to switch over, according to BNP Paribas SA analysis. Total assets under management are about €1.9tn ($2.2tn), according to Dutch central bank data.The funds will also have less need for long-dated interest-rate hedges under the new system. Bets on a steeper curve — where long-end yields rise more than the shorter ones — was a popular bet for much of this year as investors positioned to profit from the Dutch shift.“This year’s surge in long-dated euro-area swap rates looks set to continue into 2026 after the European Central Bank added a note of caution about the impact of the Dutch pension-fund reform. ...The reform will see funds transitioning to asset allocations that have a shorter interest-rate hedge, leading to reduced demand for long-dated bonds and swaps and possibly increasing volatility in the market for long-term financial instruments,” says Ven Ram, Macro strategist at Bloomberg.The steepening move petered out in October amid doubts over the number of funds ready to change to the new system and their hedging requirements. But it has picked up again in recent weeks, a development that strategists have attributed to more Dutch pension funds getting the green light from regulators to make the switch.The gap between 10- and 30-year interest-rate swaps is around 32 basis points, the highest since 2021. It started the year around minus 20 basis points. 

Investors are betting big that the Federal Reserve will cut interest rates again when policymakers meet next month, erasing doubts that had tipped the odds against a move as recently as last week and setting the stage for gains in US bonds.The amount of new positions held by traders in futures contracts tied to the central bank’s benchmark has surged in the past three trading sessions, with back-to-back record daily volumes seen in the January contract last week. Market pricing now signals roughly 80% certainty of a quarter-point move at the Fed’s December meeting, compared with 30% odds just days ago.The shift in rate sentiment started after last week’s delayed September jobs data, which painted a mixed picture. It then picked up steam on Friday after New York Fed President John Williams signalled he sees room for a reduction “in the near term” amid labour market softness.“The Fed is very divided,” but it looks like “doves have outnumbered hawks,” said Tracy Chen, a portfolio manager at Brandywine Global Investment Management.This week, San Francisco Fed President Mary Daly backed lowering rates at the next meeting, while Governor Stephen Miran on Tuesday reiterated his case for large interest-rate cuts even as inflation remains stubbornly above the central bank’s preferred level.Fed Chair Jerome Powell and his allies on the policy-setting committee are “on board with a cut,” despite pushback from other officials who are more concerned about inflation, said Subadra Rajappa, a strategist at Societe Generale. With recent soft economic data, including the labour market, “Powell will be able to convince the rest of the committee.”The dovish tone in futures is echoed in the cash Treasuries market, where this week’s client survey from JPMorgan showed net long positions rising to the most in about 15 years.On Tuesday, the 10-year US yield fell below 4% for the first time in a month, after White House National Economic Council Director Kevin Hassett emerged as the front-runner to serve as the next Fed chair, boosting expectations for lower rates over the next year. The yield was little changed at 4% on Wednesday.It’s normal for Fed officials to guide Wall Street toward their ultimate decision ahead of the meetings to avoid surprises. Only three times in more than two years — covering a total of 20 Fed meetings — have traders not fully priced in an outcome this close to a policy decision.The combined amount of new positions added in January fed funds futures has been close to 275,000 contracts since Thursday. That’s equivalent to approximately $11.5mn per basis point of risk, or 37% of the total open interest in the tenor as of Tuesday’s close. The contract rallied from as low as 96.18 Thursday to as high as 96.35 on Monday, signalling new long positions added.“The market largely viewed the comments from Williams as Powell playing his hand, so to speak,” said Blake Gwinn, the head of US interest rate strategy at RBC Capital Markets. “Data this week has leaned that way too.”While most Wall Street strategists are now calling for a December reduction, not all are as convinced as traders that it will happen. Those at Morgan Stanley last week scrapped their prediction for the central bank to ease, while JPMorgan Chase & Co also leans toward the Fed holding next month, “though December should remain a very close call.”“We continue to think they will cut in December, but I think after that the outlook is a little bit more uncertain,” said Tiffany Wilding, economist at Pacific Investment Management Co, on Bloomberg Television. “Overall the economy has held up remarkably well from a growth perspective this year, but nevertheless there are down side risks to the labour market and inflation appears to be kind of around 3%, clearly above the target.”Here’s a rundown of the latest positioning indicators across the rates market:JPMorgan Survey: For the week ended November 24, investors’ outright long positions rose 4 percentage points, to the most since April, pushing the net long positioning to the most since October 2010. Shorts dropped 1 percentage point on the week.New risk in SOFR options: In SOFR options out to the Jun26 tenor there has been a surge in open interest in the 96.25 strike, largely due to a big jump in positioning via Dec25 calls over the past week. The strike has been used across multiple structures targeting hedging around a 25bp rate cut at the December FOMC meeting, including SFRZ5 96.125/96.25 call spreads and SFRZ5 96.25/96.3125 call spreads. There has also been continued demand for SFRZ5 96.1875/96.25/96.3125/96.375 call condors. The SFRZ5 96.1875/96.25 call spreads have also been popular plays over the past week.Treasury options premium: The premium paid on options to hedge Treasuries over the past week has been steady around neutral level across the futures strip. Premium in the front and intermediates of the futures strip continues to slightly favour calls over puts, indicating traders paying more to hedge a Treasuries rally in the front end and belly of the curve versus a selloff. The December Treasury options expired November 21. 

Property developers in the United Arab Emirates are raising billions through a growing arsenal of funding tools — from Islamic bonds to private credit — as they ride one of the Gulf country’s longest real estate booms in years.Data compiled by Bloomberg show dollar bond and sukuk issuance alone has grown more than twelve-fold to $6bn since 2021, underscoring how widely developers have accessed the market in a short time.Names once unknown to international debt capital markets, including Arada Developments, Binghatti Holding and Omniyat Holdings, are now regular sukuk issuers, joining heavyweights like Emaar Properties, Aldar Properties, and Damac Properties.More new names like Samana Developers are planning to test capital markets, and Arada is even weighing a convertible sukuk, a rare move in a region still new to equity-linked financing.Many firms are racing to get more cash to buy land as the competition to secure prime locations in the UAE intensifies. Their push into new pockets of the credit market highlights a growing role for local and international bond investors in Dubai real estate. Property prices have already risen more than 70% since 2019 in the city, and are also surging in the emirates of Abu Dhabi and Sharjah.Still, the flood of issuances has created a growing wall of maturities, with about $8bn due by 2030. Some analysts have flagged rising risks from Dubai’s extended boom, though most say the sector’s fundamentals remain solid for now. The emirate continues to see record pre-sales and strong inflows from wealthy overseas buyers, boosting developers’ profitability and cash buffers.“The demand for UAE real estate bonds and sukuk is unlikely to dry up anytime soon,” said Apostolos Bantis, managing director of fixed income advisory at Union Bancaire Privee. “Global investors remain attracted to higher-quality developers offering yields that stand out compared to developed markets.”At the same time, a global slowdown, regional unrest, or a drop in oil prices could sap confidence and leave some homebuyers exposed if any developers struggle to deliver. A wave of new property supply has also led Fitch Ratings to forecast a “moderate correction” in late 2025 into 2026.UBS Group AG has warned that Dubai’s bubble risk has surged since 2022, though the city still sits below the bank’s “high-risk” category, helped by strong rental yields and comparatively affordable home prices.In debt markets, the flood of new real-estate sukuk deals could test market appetite, particularly as investors look to avoid over-exposure to a single sector. Fady Gendy, fixed-income portfolio manager at Arqaam Capital, said the large volume of deals this year has led to some signs of “investor fatigue,” apparent in how some recent deals have been trading below their re-offer price and with higher new issue premiums paid.“This is to be expected after the large volume printed from the sector this year, and that being concentrated across a few names,” he said.None of that is deterring developers who want to raise money in the short term. For many, private credit has emerged as a vital new source of liquidity as traditional banks approach their real estate exposure limits.Omniyat tapped Nomura for a $100mn private credit facility earlier this year, and private credit specialists say most of the current demand in the UAE is coming from developers.“Banks have hit sector limits and are prioritising lending to large, government-backed developers,” said David Beckett, head of origination and Middle East business development at asset manager SC Lowy. “That leaves private developers underfunded, but they’re seeing strong returns and are willing to pay private credit spreads.”Some firms are looking beyond debt markets to potential listings, although no definitive plans have been announced yet. Binghatti, Samana and Arada are among those weighing possible initial public offerings.Gendy would see a rise in IPOs as a welcome shift, not only to potentially provide fresh injections of capital, but also to strengthen transparency and corporate governance. One key risk to watch, he added, will be dividend policy, to ensure developers maintain sufficient buffers for any future downturns. Investors are no strangers to the Dubai property sector’s swings: Damac Properties was taken private in 2022 at a sharp discount to its original listing value.Despite potential challenges, real estate investors and developers are counting on demand to hold up, partly because expats continue to pour into Dubai and the nearby emirates.Gendy stressed that near-term sector fundamentals remain intact, and concerns about a potential supply glut in 2026 or 2027 may be overblown, as actual new developments typically fall short of projections.“That said, if there is a more severe correction, we would expect to see some dispersion in market pricing between the various real estate issuers, on account of differences in their business models, and operating and financial metrics,” Gendy said about the bonds the builders are issuing. 

Doha will host the FIFA Arab Cup Qatar 2025 from December 1 to 18, offering a renewed opportunity to deepen ties among Arab nations and reaffirming that the tournament's significance extends far beyond the football pitch.Bringing together 16 Arab national teams in the finals and 14 in the preliminary qualifiers, the event stands as a vibrant platform for strengthening cultural and historical connections among Arab peoples. It underscores sport's role as a unifying force that reinforces shared identity, values, and traditions, and reflects the organizing committee’s commitment to cultural and sporting cooperation that nurtures a deeper sense of belonging to a unified Arab world.Since hosting the previous edition in 2021, Qatar has positioned the Arab Cup as a meaningful space for renewing inter-Arab bonds and building bridges of friendship and cultural understanding.The tournament has gained added significance under Qatar's hosting, as the country has become a model for staging major global events. Qatar offers an environment that celebrates Arab identity, honors heritage and history, and provides world-class infrastructure capable of accommodating an event of this scale -- uniting nations bound by a shared past and a common future.Notably, Qatar succeeded in bringing the Arab Cup under the official FIFA umbrella for the first time in 2021, transforming it from a traditional regional competition into a comprehensive Arab gathering. The tournament brings together fans from across the region not only to support their national teams but also to celebrate the richness of Arab culture -- through language, dress, music, customs, and traditions. These scenes of unity, vividly reflected in Qatari stadiums, highlight the strong bonds shared by the peoples of the region despite geographical and social differences.The 2025 edition will further reinforce Arab identity through a wide range of cultural and artistic activities. Planned events include musical and artistic performances, fan zones showcasing diverse elements of Arab culture, and interactive spaces that bring communities together.The organizing committee said fans across the country will enjoy a rich program of cultural and entertainment activities throughout the tournament, supported by seamless transportation services ensuring easy access to all stadiums and venues.One of the tournament's most distinctive features is its enthusiastic fan engagement. Stadiums and fan zones become vibrant meeting points where Arabs interact, wear traditional attire, exchange chants and songs, and share their national and cultural expressions. This festive atmosphere has become as central to the event as the matches themselves.This unique cultural exchange strengthens social bonds among Arab fans and adds a profound human dimension to the tournament. The experience extends beyond football, creating shared memories that will endure in the collective Arab consciousness for years to come.The State of Qatar is always keen to utilize its capabilities to deliver impressive organizational standards. Following the 2022 World Cup and, before that, the 10th edition of the Arab Cup in 2021, Qatar is set to host the 11th edition of the FIFA Arab Cup, to be held from Dec.1-18.Qatar's commitment to strengthening cultural and historical ties among Arab peoples has been evident in the upcoming edition of the Arab Cup and was reflected in statments made by HE Minister of Sports and Youth and President of the Organizing Committee for the FIFA Arab Cup Qatar 2025 Sheikh Hamad bin Khalifa bin Ahmed Al-Thani who emphasized that the tournament holds a special place in the region and carries significance that extends beyond football matches.In his remarks about the tournament, His Excellency said that the tournament, "celebrates the positive values of Arab football and once again highlights sport's ability to bring people together and build bridges of communication."His Excellency added that the Arab Cup is a platform that brings together players and fans alike, a forum for entrenching the values of unity and solidarity, and enhancing feelings of belonging and a shared identity. It also reflects the Arab youth's passion for sport.HE Minister of Sports and Youth said the FIFA Arab Cup Qatar 2025 carries a message calling for Arab unity and represents a window for introducing our authentic culture and ancient heritage. It is also a platform to highlight the unlimited potential of Arab youth in sports and various other fields.For his part, Algerian international Baghdad Bounedjah, a player for Al-Shamal SC, affirmed that the significance of the Arab Cup extends beyond competition on the pitch. He stressed the tournament's value in introducing the world's people to Arab and Islamic culture and in promoting Arab identity on the global sports stage.Bounedjah said in statements published by the tournament's organizing committee the Arab Cup is a grand celebration that reflects the unity of the Arab peoples and their passion for football, while also highlighting the region's capabilities and its ability to host world-class sporting events.For his part, Jordan national team star Yazan Al Naimat praised the FIFA Arab Cup Qatar 2025 as a gathering that celebrates Arab talent.The Al-Arabi SC player said the event contributes to the development of football in the Arab world and introduces nations to the region's passion for the sport. He also commended the remarkable success of the previous edition hosted by Qatar in 2021, which provided a major opportunity for Arab players to appear on the global stage.The Arab Cup has not only attracted regional attention. It is also followed by audiences from around the world. Hosting the tournament in Doha reaffirms Qatar's pivotal role in uniting the Arab world both athletically and culturally, and its ability to present an honorable Arab model in tournament organization, one that reflects the civilized image of the Arab world before the international community.For Arab fans, the Arab Cup is no longer just a sporting competition. It is a message of unity, solidarity, peace, and connection. It affirms the shared heritage and deep-rooted history of all Arab peoples and offers an opportunity to strengthen historical bonds across generations, highlighting the importance of enhancing Arab cooperation to leave a positive impact on the cultural, sporting, and social levels across the Arab world.

Ahli Bank (a Qatari public shareholding company) successfully issued QAR 500 million in debt securities to international and local investors through ABQ Finance limited company (a special-purpose company) owned fully by Ahli bank.In a statement published on the Qatar Stock Exchange (QSE) website, the bank explained that the issuance is part of its USD 2 billion Medium-Term Note (MTN) program.

QNB Group announced the successful completion of an inaugural benchmark green bond issuance in euro currency under its Medium Term Note Programme in the international capital markets. Under this Programme, a five-year, EUR750mn tranche was launched onSeptember 23. This is the largest ever Euro denominated green bond issuance from aGCC bank. QNB Group is the leader of sustainability initiatives in the region, and it has embedded the topic of sustainability throughout the organisation to deliver positive impact to thesocieties we serve. This landmark transaction reflects QNB’s steadfast commitment towards further development of green and sustainable finance products in Qatar and its core markets as per its Sustainable Finance and Product Framework. The issuance attracted overwhelming interest from a wide range of global investors leading to the issuance being heavily oversubscribed, with peak orders at 2.5 times theissue size. The pricing on the bonds tightened significantly with the final pricing at 75 bps over mid swaps compared to the initial pricing of 100-105 basis points over mid swaps. The fixed coupon on the bond is 3.00% annually. The order book reflected significant interest across various geographies with key interest from European and Asian investors, reflecting QNB Group’s strategy ofdiversifying its funding sources in terms of geography and currency mix. Green investors, who include dedicated funds that invest in assets with rigorous sustainabilitycriteria represented 56% of the allocation. The proceeds of this green bond will be utilised for financing or refinancing portfolio ofprojects that qualify under the eligible green project categories as set out in the QNB Group’s Sustainable Finance and Product Framework. The transaction was arranged and offered through a syndicate of Joint Lead Managersand Joint Bookrunners that included Barclays, Crédit Agricole CIB, HSBC, QNB Capitaland Santander.

Long-dated bonds are facing renewed selling pressure, ramping up borrowing costs around the world and creating a headache for investors and policymakers.Yields on 30-year US Treasuries were around 5% in early September, a level last reached in July. Those on Japan’s 20-year notes climbed to their highest since 1999, while yields on 30-year UK gilts jumped to levels last recorded in 1998. French and Australian government bonds are among the others experiencing a selloff too.The rising yields signal investors are demanding extra compensation for holding government debt in the face of spiralling budget deficits and sticky inflation. The mounting worry is that politicians lack the ambition, or even the ability, to rein in their countries’ debt, while central banks may struggle to combat the mix of sustained price pressures and ebbing economic growth.What’s been happening with long-dated bonds?Traders usually buy and sell bonds based on the relative appeal of their fixed coupon payments. The longer there is until a bond “matures,” the more that can go wrong in the interim. Long-term bonds with a duration of between 10 and 100 years tend to offer higher interest rates than shorter-term treasury bills that are repaid in less than a year, to compensate buyers for the additional risk.When a country’s economic outlook worsens, bond yields typically fall. This is because a weaker economy encourages central banks to shift their focus from combating inflation to stimulating economic activity. That means a bias toward lowering benchmark interest rates, boosting the relative appeal of bonds versus cash in the bank.But lately, yields for long bonds have been rising. In the US, that’s in part because the economy has slowed, not collapsed, and inflation has remained stronger than forecast.Why are there concerns about debt and deficits?Governments across the world loaded up on cheap debt after the 2008 global financial crisis, then borrowed even more to cope with Covid-19 lockdowns and accompanying recessions. Global debt reached a record $324tn in the first quarter of 2025, driven by China, France and Germany, according to the Institute of International Finance.A surge in inflation since the pandemic made that scale of borrowing harder to sustain. Major central banks raised interest rates and wound down their bond-buying programs, known as quantitative easing, which were designed to lower borrowing costs. Some central banks are now even actively selling the debt they accumulated via quantitative easing back into the market, adding further upside pressure to yields.The concern is that if bond yields stay high and governments fail to get their fiscal houses in order, the cost of servicing some of that debt will just keep climbing.In the US, the cost of President Donald Trump’s sweeping tax-and-spending law is a further worry for bond investors. The One Big Beautiful Bill Act could add $3.4tn to the US deficit over the next decade not accounting for dynamic effects such as the potential growth impact according to the Congressional Budget Office, which provides nonpartisan analysis of US fiscal policy.Moody’s Ratings stripped the US of its last-remaining top credit score in May, citing fears that the ballooning national debt and deficit will damage the country’s standing as the preeminent destination for global capital.What’s been driving the recent bond selloff?As well as the lingering debt strains, politics have been a major factor.After criticising Federal Reserve Chair Jerome Powell for not cutting interest rates more quickly, Trump’s move to oust Fed Governor Lisa Cook has deepened concerns around the central bank’s independence. The worry is that Trump succeeds in replacing Cook and others with officials more inclined to lower borrowing costs regardless of inflation risks.A deluge of corporate debt sales isn’t helping either, as this can sometimes siphon demand from government bonds. Both companies and sovereign borrowers across the world sold at least $90bn in investment-grade debt in early September, as parts of global credit markets neared or toppled records in one of the busiest weeks this year.September is also a traditionally bad month for longer-dated bonds as traders return from their summer break and readjust their portfolios. Government debt globally with maturities of over 10 years posted a median loss of 2% in September, according to data compiled by Bloomberg.The mix of risks is pushing the so-called “term premia” what investors demand for the uncertainty of holding bonds for longer ever higher.Why is a spike in long bond yields a problem?Investors want the bond market to be safe and boring, as these assets are what many of them hold to ensure a rock-solid stream of income to balance out the volatility of higher-risk, higher-reward investments such as technology stocks.When longer-term yields jump, they feed into mortgages, auto loans, credit card rates and other forms of debt, squeezing households and companies, and thus broader economies.And if long bond yields stay high for longer, it will gradually affect how much it costs a government to borrow money. That, and any accompanying deterioration in economies, could mean a “doom loop” in which debt levels climb even higher no matter what governments do with tax and spending.At times, rebellions in markets can even lead to the fall of governments as seen in the UK in 2022 after then-Prime Minister Liz Truss’s mini-budget, which included billions in unfunded commitments, roiled the bond market and led investors to drive up borrowing costs. In the early 1990s, so-called bond vigilantes were said to be powerful enough to force President Bill Clinton to rein in US debt.Where could things go from here?It’s not clear what a prolonged period of higher borrowing costs would mean for the mountain of long-term debt that governments binged on during 15 years of ultra-low interest rates. The upward shift in yields is already leading to new phenomena with unpredictable consequences.One example: Japan’s government bonds used to have such low yields that they acted as a kind of anchor by adding downward pressure on yields the world over. But they’ve shot higher in recent months, adding to the volatility in global bond prices and attracting foreign investors to Japanese debt in significant numbers. This could mean fewer buyers for debt sold by other nations.In the UK, the pressure is mounting on Chancellor Rachel Reeves to show she’s on top of the nation’s finances in an upcoming budget.In the US, there’s still concern that post-pandemic inflation isn’t yet under control and that Trump’s tariffs could add further inflationary pressure that exacerbates the bond yield spike. On the other hand, his trade war may also dampen economic activity, leading the Fed and other central banks to cut interest rates.Or both could happen, whereby there’s a surge in prices accompanied by falling economic output or zero growth a situation known as stagflation. This would add to the uncertainty over monetary policy, forcing the Fed to choose between supporting growth or suppressing inflation.Is this a taste of the future for long bond yields?Jamie Rush, Tom Orlik and Stephanie Flanders of Bloomberg Economics argue that politics and structural forces could potentially make 10-year Treasury yields of 4.5% the new normal.That comes as decades of decline in the “natural” interest rate the real interest rate that would prevail if the economy were operating at full employment with stable inflation have already ended, and partially reversed.“In the years ahead, the natural rate is set to edge higher still,” Rush, Orlik and Flanders wrote in a book, The Price of Money, published in August 2025. “If risks from debt, climate, geopolitics, and technology crystallise, it could rise quite a lot.”