Inflation now stands out as the principal threat to global debt markets as energy prices climb in the wake of the U.S.-Israeli air war against Iran, a senior OECD official warned ahead of the organisation's annual debt report.
"Now we are having another big stress test," Carmine Di Noia, director of financial and enterprise affairs at the OECD, said in an interview before the Paris-based group's report was released on Wednesday. The comment came as oil jumped 16% this week and government bond yields rose on investor concern that sustained higher energy prices could feed into inflation.
Those yield moves matter because governments and companies are expected to tap markets heavily in 2026. The OECD projects combined borrowing of $29 trillion this year, up from just over $25 trillion a year earlier. Di Noia said that with financing needs and borrowing costs already elevated, further increases in yields would "put even greater pressure" on debt markets.
Issuers have already shortened the maturities of new debt to reduce near-term interest expense and market exposure, the OECD noted. But a rise in yields could accelerate that trend, amplifying refinancing risk as a larger share of outstanding paper comes due sooner. The report highlights that the share of government bond issuance maturing in more than 10 years hit its lowest level since 2009 and that corporate issuance reached a record low for such long-dated tenors in 2025.
Those maturity shifts feed into a concentrated refinancing profile. Refinancing needs reached a record $13.5 trillion, representing 80% of borrowing for OECD countries in 2025, according to the report. That means a greater portion of debt will require rollover in the near term, making governments and firms more sensitive to movements in yields.
Emerging markets carry heightened vulnerability in this configuration: more than a third of their debt stock matures within the next three years, raising the risk that rising yields and tighter conditions will increase debt-servicing burdens for those economies.
The report also underscored how post-pandemic monetary tightening pushed bond yields higher and raised government interest payments substantially. By 2024, those interest payments had already surpassed defence spending for many countries, the OECD noted.
Investor base and volatility
Di Noia highlighted that the investor base for bond markets is shifting, with price-sensitive participants such as hedge funds taking a larger role. The OECD warned this change could amplify volatility in fixed-income markets, especially when combined with geopolitical uncertainty that has been heightened by the recent conflict.
Shorter maturities, heavy issuance and a changing set of investors create a dynamic in which market moves may pass through more quickly to borrowing costs, the OECD cautioned.
AI-driven borrowing and corporate bond market strain
The OECD also flagged a distinct source of potential pressure on corporate debt markets: rapid borrowing needs tied to artificial intelligence infrastructure. Nine major hyperscalers are projected to require $4.1 trillion of capital spending through 2030 to expand data centres and processor capacity. If half of that amount were financed through bond markets, those nine companies could account for about 15% of global corporate issuance.
The report named major technology firms among those hyperscalers, including Amazon, Alphabet's Google, Meta and Microsoft. Because the same group makes up roughly 12% of global stock market capitalisation, the OECD suggested that greater overlap in funding requirements could bring corporate bond and equity markets closer together. Di Noia said such convergence "might make it harder for investors to diversify investments and hedge risk."
Beyond hyperscaler capex, the OECD estimated AI infrastructure could require an additional roughly $5 trillion of investment by 2030. That demand is likely to raise borrowing needs in sectors tied to that build-out, including real estate, energy and IT hardware.
"This calls into question the ability of the currently $17.2 trillion global non-financial corporate bond market to absorb new supply of this magnitude, especially in a context of still-expanding sovereign bond borrowing and a changing investor base," the OECD warned.
In sum, the OECD's analysis presents a layered stress scenario for debt markets: an inflation shock driven by an energy-price surge, concentrated near-term refinancing needs from shorter maturities, a changing investor landscape that could heighten volatility, and substantial new corporate issuance related to AI and ancillary infrastructure. Together, these forces could intensify sensitivity to yield moves and complicate debt management for sovereigns, corporates and emerging markets.