The Rise in Yields Is Not a Global Debt Story

The recent rise in interest rates across most economies could, at first glance, reflect investor concerns about rising global debt.

However, data from the Bank for International Settlements (BIS) do not point to any broad-based deterioration. The data cover public-sector, corporate and household debt across 44 countries. The BIS released its figures for the first quarter of 2026 in September, and the Institute of International Finance (IIF) data for the second quarter have shown no sign of acceleration. In advanced economies, total debt as a share of GDP is therefore close to its lowest level since the 2008 financial crisis.

Our analysis

Several observations emerge from the chart. First, this trend primarily reflects robust nominal growth, which mechanically improves the denominator of the debt-to-GDP ratio. Even though overall credit growth has increased, economic growth has also accelerated. The global economy is therefore not currently in a broad-based leveraging cycle similar to the early 2000s.

A closer look reveals a more mixed picture. Recently, the private sector has tended to deleverage in most countries, while public debt has risen slightly.

Against this backdrop, the recent rise in interest rates is likely driven more by shifting expectations for monetary policy amid persistent inflationary pressures than by broad concerns over global debt dynamics. Economic research confirms that higher debt issuance volumes do exert upward pressure on yields, but the estimated effect is materially smaller than the rate moves observed recently.