Business · Markets · 1 day ago
Inflation, government deficits and AI blamed for bond market losses
Bond prices have fallen sharply this year, especially since summer, as interest rates rose and existing bonds became less attractive.
The losses affect investors around the world, including households that rely on bonds for savings.
US holders of 10-year government bonds have lost about 9% of their investment, while losses on German and French bonds are about 5% and nearly 11%.
Economists at ING attribute recent rises in US rates to inflation, government deficits and artificial intelligence, which they say account for 50%, 30% and 20% respectively.
Inflation has risen from about 2% in spring to around 4%, and households expect it to stay elevated over the next decade.
Other pressures, including shifts in Asian investment and growing interest in gold, have also weighed on US bonds, but the analysis says they do not explain the sharp fall since summer.
A peace deal that eased pressure on prices could address about half of the problem, according to the analysis.
Bond markets have suffered heavy losses this year, especially since the summer, as interest rates rose.
Investors in 10-year US bonds have lost about 9% of their money, while losses in European government bonds range from 5% for German bonds to nearly 11% for French bonds.
Three ING economists attribute the recent rise in US interest rates 50% to inflation, 30% to government deficits and 20% to artificial intelligence.
Inflation has risen from 2% in the spring to around 4%, and households expect it to average 4% over the next decade.
Other pressures include shifts in Asian bond holdings and a growing share of central bank reserves held in gold.
- Who
- Bond investors have incurred losses. Three ING economists examined the causes of rising US interest rates.
- What
- Bond prices have fallen, with inflation, government deficits and artificial intelligence identified as drivers.
- When
- Losses have been especially severe since the summer. The article was published on October 10, 2026.
- Where
- The article discusses US and European bond markets.
- Why
- The ING economists attribute the rise in US rates to inflation, government deficits and artificial intelligence.
This story does not have two clearly opposing sides.
There must be only one culprit, no matter how many murders are committed
Inflation rose from 2% to around 4%.
Bond market losses worsened, and the article says the major decline began.
El Mundo published the article.
- US 10-year bonds
- Investors have lost 9% this year
- German bonds
- Losses of 5%
- French bonds
- Losses of nearly 11%
- ING economists' attribution
- Inflation 50%; government deficits 30%; artificial intelligence 20%
- Inflation
- Rose from 2% in spring to around 4%
Sources
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