US borrowing costs are rising due to factors beyond war inflation. Real yields are increasing, indicating bond investors are looking past immediate price pressures. Growing public debt, AI investment, and the possibility of central banks raising interest rates are also contributing. Experts suggest these higher borrowing costs may persist even after oil prices stabilize, impacting governments and economies.

G7 bond yields surge to 4.6% as Iran war closes Strait of Hormuz, pushing oil past $111. Central banks face inflation-growth dilemma with no easy answers.

Poster | U.S. war with Iran could add billions of dollars in interest payments to U.S. debt: FT-