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Uday Kotak Warns Global Bond Markets Face Roller-Coaster Volatility
Uday Kotak says interest rates around the world may move up and down sharply.
He is concerned because governments are borrowing more money and building larger debts.
When governments borrow heavily, investors may demand higher returns for buying their bonds.
Japan’s 10-year bond yield has risen above 3%, a level not seen there since 1996.
Long-term borrowing costs have also been high in the United States.
Kotak warned that central banks might create more money to help manage debt pressures.
More money in the economy could make inflation worse and push short-term interest rates higher.
These changes could affect loans, company values, currencies and investments.
Uday Kotak warned that global interest-rate markets could experience a “roller coaster ride.”
He linked the risk to rising government debt, wider fiscal deficits and higher bond yields.
Japan’s 10-year government bond yield exceeded 3%, its highest level since 1996.
The United States 30-year Treasury yield reached 5.34% in August, the highest since 2007.
Kotak said central-bank balance-sheet expansion could increase inflation and market turbulence.
- Who
- Veteran banker Uday Kotak and global investors and central banks.
- What
- Kotak warned of increased volatility in global interest-rate and bond markets as debt, deficits and yields rise.
- Where
- Global bond markets, including those of Japan, the United States, Germany, the United Kingdom and Australia.
- When
- In a recent post on X; the article also cites market levels reached in August.
- Why
- Rising government borrowing, fiscal deficits, inflation concerns and higher energy prices are putting pressure on bond markets.
Key facts
- Warning
- Uday Kotak described a possible “roller coaster ride” in global interest-rate markets.
- Japan 10-year yield
- The yield moved above 3%, reaching its highest level since 1996.
- United States 30-year yield
- The yield reached 5.34% in August, its highest level since 2007.
- Policy shift
- The Bank of Japan ended its negative-interest-rate policy in 2024.
- Fiscal pressures
- Rising government debt and widening deficits are contributing to higher bond yields.
- Inflation risk
- Central-bank balance-sheet expansion could increase money supply and fuel inflation.
- Investor impact
- Higher yields can affect borrowing costs, equity valuations and currency movements.
Sources
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