As we begin the 2026 financial year, long-term sovereign bond yields are reaching unprecedented highs not seen for decades. Why is this happening? Is it sustainable? What are the implications for the world’s various economies? These are just some of the questions addressed in this new Special Edition video, introduced by Chief Economist Isabelle Mateos y Lago.Drawing on insights from the banking sector and teams specialising in emerging and advanced economies, the economists from Economic Research will explain why the rise in bond yields is problematic.
When economists talk about public debt, they often refer to the ‘sustainability’ of the debt. Hélène Baudchon, deputy chief economist, explains what this means and when a debt trajectory can be considered unsustainable.
The scope for manoeuvre available to fiscal policy depends heavily on the interest rate environment, and this has tightened significantly in recent months.Guillaume Derrien, economist in the advanced economies team, explains where we stand today in the advanced economies, against a backdrop of high debt-to-GDP ratios and moderate growth.
Against the backdrop of rising bond yields in the Eurozone, Thomas Humblot, economist in the banking economics team, analyses the implications for the cost of bank financing and for borrowers, whether individuals or businesses.
Whilst long-term bond yields in advanced economies rose over the summer, Cynthia Kalasopatan Antoine, economist in the emerging economies team, explains what has been happening in emerging markets during this time.Are public finances stronger in emerging markets than in developed countries? What is the dominant trend when comparing key fiscal indicators?What emerges from a comparison of debt sustainability criteria?
